Choosing sides in this series isn't supposed to be cut and dry. I think that's the point the writers are trying to get across. Good people occasionally do bad things, and vice versa. Motivations and self-interest seem to drive this dichotomy. Silver explains this point of view when he says he doesn't need to trust Flint, as they share the same self-interest. Also, Rackham and Max have also expressed this idea on occasion throughout the series. (On a side note, this theme is prevalent throughout Game of Thrones as well, both the idea of common self-interest and the whole good/bad in everybody). For me, this one of the themes that makes this show so appealing. If we look at everything in absolute terms, then civilization beats lawlessness every time. Unfortunately, nothing is absolute.
As far as the sustainability of Nassau and the Pirate Republic Flint envisions should the pirates prevail; Flint, Miranda and Thomas knew full well from the beginning that continued piracy could never make it work. They understood that it would take farmers, blacksmiths, carpenters, etc., to sustain them and make them a viable "nation" unto themselves. Even Woodes Rogers understands this, which is why he offered full pardons to anyone who would give up piracy. So even if England (and Spain) would allow them to keep the island, essentially create an independent colony (or nation), they would still have to abandon piracy or they would invite their own destruction by the nations whose ships they would have to attack.