I think it's interesting because we don't assume "honor among thieves". Otherwise there's no useful way to distinguish morality from immorality.
"x cooperates with y" and "y is moral" shouldn't imply "x is moral".
"x cooperates with y" and "y is moral" shouldn't imply "x is moral".
A group that strives to induce suffering on the outgroup, or on uwilling members of ingroup, are "bad guys".
A group that strives to limit and reduce suffering, for the ingroup, outgroup, or both, are "good guys", as long they don't match the previous definition.
Corollary: "good guys" normally stay away from aggression.
The difference from your euthanizing sect is that nobody can be forced to follow this path (not just morally, but also technically).
Framed that way, Buddhism sounds remarkably nihilistic.
I like to divide morality into happiness ("utility") and rights. All else equal, increasing aggregate happiness is better. However, if increasing (the authority's measure of) aggregate happiness tramples a lot peoples' rights, that sucks.
Rights (and their implications) are easier to codify legally than happiness maximization. This eigenmagic seems easier to compute (because it's easier to encode) for happiness than for rights.
(One can frame rights as an implication of happiness maximization. Some economists do this. A (properly bounded) right to private property, for instance, increases net happiness by avoiding tragedies of the commons. Thievery should be illegal because stolen goods are on average less valuable to the thief than the victim. I don't know whether such analyses imply all the rights we'd like, or how absolutely.)
Since both happiness and utility are strictly subjective (e.g. not directly measurable or comparable), such proxies is our only hope to produce some formal, computable approaches to limiting of the suffering.
But the intention to limit suffering for most of the outgroup seems a key indicator for me.
Even though I would not say it is a good thing, I would respect somebody more who stood up for themselves and were aggressive in tense moments – if it seemed justified (provoked by the aggressive party).