I think what I meant is that Superman's villians ARE villainous...they're greedy, or cocky, or thieves, or warriors, or just plain insane.
But they're not evil in the real-world sense of it. It's ok for the Toyman to ruin Christmas, but not for him to be a child murderer. It's ok for Luthor to try to usurp governments and take over the world (with cool inventions) but not for him to take a pistol and murder people in cold blood, as we'd expect the Joker to do. These villains have flaws, and they are criminals, but they are not murderers. Except in the nineties.
I don't know about that. Villains like Luthor were extremely ruthless in the Golden Age and had few redeeming qualities. It's not really a recent trend to have Superman villains being really evil. Darkseid and Mongul were known to regularly kill people and even destroy whole civilizations. Even the Toyman had his darker moments--I believe he even killed the skinny Toyman. Heck, Metallo stole the hearts from people while they were still alive. All of these things happened before the Iron Age, too.
But I think there's a big difference between evil and exploitation. Just look at horror movies and you'll see that. We obviously don't look at
Psycho as being the same as
Last House on the Left--one is horror, the other is exploitation. It's the same with the past ages and the Iron Age. You brought up the example of the Toyman killing children, which is a good example of having a character become "dark" instead of writing a good story about him that shows why he's a threat to Superman. I think a better approach would've been to have the Toyman hate everyone EXCEPT children, who he would never hurt or abuse. It would've shown that even villains have good sides.
That being said, I do think there are certain kinds of things that we shouldn't see often in Superman. Stories that are too dark destroy the mood and theme of the stories.
Basically, I don't really have a problem with Superman villains killing, just as long as it isn't exploitation. Which means no killing for the "shock factor," too. No women in refridgerators.