Almost everything in there is dedicated to giving rights to the user instead of the other way around. In the end, even if a work is created "for evil", you can get the source code, change it and make it be for good. (Not to mention the whole non-discrimination thing is considered by some to be pretty "good" in nature)
Public domain allows you to do anything you want at all with the source material and the product never has to give anyone any rights, prevent discrimination, allow access to the source code, or do anything positive whatsoever. I can take the SQLite source code, rebrand it "SQLPeter", change it so it corrupts your data randomly, remove all documentation and tests and keep the source code from you and charge $1,000 for support.
The work itself may be made with the best of intentions, but the license (public domain) allows it to be used for more evil than the Open Source license would have permitted.
No restriction on usage or brand confusion. That seems a rather immaterial difference along a hypothetical alignment spectrum.
GPL folks are willing to accept fewer rights in exchange for a guarantee that at least that subset of rights will be passed on to all parties. Permissive (BSD/MIT/etc.) folks are OK with the idea that someone might build proprietary software someday, and prefer the license that lets you do the most stuff right now.
First.
Evil by definition is:
6. that which is evil; evil quality, intention, or conduct: to choose the lesser of two evils.
7. the force in nature that governs and gives rise to wickedness and sin.
8. the wicked or immoral part of someone or something: The evil in his nature has destroyed the good.
9. harm; mischief; misfortune: to wish one evil.
10. anything causing injury or harm: Tobacco is considered by some to be an evil.
Therefore, if you want to 'do evil' you can harm, cause mischief, cause misfortune, cause injury or harm, etc etc etc. So that's what "you can do evil" means.
Second.
Evil is not by definition, "doing something you shouldn't do," as evidenced in the definition in the URL linked above. Evil is just bad. Sometimes it might be necessary to do evil. The bible has innocent god-fearing people do evil all the god-damn time - but it's something they do In The Name Of The Lord.
Third.
Why the hell are you telling me this? I never said anyone should or should not 'ban evil', I was merely stating that the potential for good or evil in a public domain-licensed piece of software like SQLite can't be compared to an Open Source-licensed product because the public domain is inherently more evil than Open Source.
Fourth.
'Banning evil' is not even comparable, to saying that breaking a law is illegal. Saying that breaking a law is illegal is a truism. Banning evil is a sometimes-necessary act in order to enforce a punishment for doing evil, which is the whole basis for a system of laws and penalties. You have to define what evil is and define a punishment for varying degrees of evil. Without specifically defining such laws you have a kind of tribal unspoken law which is quite subjective and not compatible with things like copyright law or software licenses.
Does that clear things up?