The key point is in the margin note to that letter:

>In the margin Tolkien wrote: 'Thus while Sauron multiplied [illegible word] evil, he
left "good" clearly distinguishable from it. Gandalf would have made good detestable and seem evil.']

><sup><sub>*The Letters of J.R.R. Tolkien* 246: To Mrs. Eileen Elgar (draft). September 1963</sub></sup>

This is reminiscent of something said by Mandos, written in an essay called "Laws and Customs of the Eldar":

>We may indeed in counsel point to the higher road, but we cannot compel any free creature to walk upon it. That leadeth to tyranny, which disfigureth good and maketh it seem hateful.

><sup><sub>*History of Middle-earth* X *Morgoth's Ring* Part 2: The Second Phase Chapter 3: "Laws and Customs of the Eldar" *Of the Severance of Marriage*</sub></sup>

It would appear as though Tolkien has a strong moral opposition to compulsion, even the compulsion towards "truth." He says something similar in another letter:

>The story is cast in terms of a good side, and a bad side, beauty against ruthless ugliness, tyranny against kingship, moderated freedom with consent against compulsion that has long lost any object save mere power, and so on; but both sides in some degree, conservative or destructive, want a measure of control.

><sup><sub>*The Letters of J.R.R. Tolkien* 144: To Naomi Mitchison. April 1954</sub></sup>

I would say, then, that though there may be a path that is unambiguously "right", Tolkien believed that free creatures should have the freedom to choose whether to follow it, or not. To deny that freedom would, at least according to my reading, conflate the "right" path with the wrong.

When Mandos says that tyranny "maketh [good] seem hateful," I interpret that as suggesting that compelling a free creature to walk the "right" path would ultimately drive them farther away from it. The "good" path would seem evil, because the all-powerful Gandalf is forcing you to follow it, and the "evil" path would seem good because you're choosing it of your own will.

I can see how that would be considered "worse."