It's more that good people don't want to hurt their friends, whereas orcs fight each other to the death anyway, so they apparently don't care as much.

It is offset by the chance to kill your own model but there can be quite an advantage in doing this in certain cases. For example if you have a goblin in combat with aragorn mounted who also charged, the chances are that the goblin is dead. If you have no other target, you aren't any worse off by shooting into combat. I believe you can also prevent a heroic combat in this fashion also, as the hero cannot move again, and cannot call the heroic as he is not in a fight.

In a way it is biased towards evil, but given that they also have a much lower chance to hit in the first place, any unbalanced effects it causes can't be relied on so it doesn't really effect the game in general. If you were to apply the rule to good, you would find that people would find a way to abuse it a bit easier and have a bigger, more negative impact. Even if you were to add a rule to try balance it out, such as good models being able to shoot over the shoulder while the front model is in combat, it is way too heavily favouring the good side. You would have to come up with a system which is far too technical if you wanted to give good the same option without removing the theme that evil is evil.

Good getting priority on turn one didn't effect too much as the armies normally deployed outside of bow range on the first turn, obviously it is quite different now, so good would come up with some reliable strategies to do some significant damage if they were always given first turn.