I posted an essay today at Warp, Weft and Way, an excellent blog of Eastern philosophy discussing this question. It's a response to a provocative post Donald Sturgeon posted last October.
He was asking, can a Daoist (specifically a Zhuangist) criticize Nazis who are following their dao, given their rejection of conventional morality and relativism? [EDIT: to be clear, "their" rejection of conventional morality means "Daoists' rejection of"...]
My essay reframes the question to ask, "Can there even be such a thing as a Nazi Dao?" The short answer is, sort of, but the goals and techniques are so destructive of Dao that they would quickly backfire and fail. They can be rejected purely on the grounds of ineffectiveness. There really can't be a Dao that seeks complete domination of nations through constant war.
The question I didn't address is, are there other "bad" goals that can have effective Daos that work and would not undermine those involved? I can't think of any, but I'm curious what others think.