Just wanted to say that the desire to view vampires as black-and-white comes from Buffy, not necessarily bad writing. It's easy, and in fact vital, for her to see vampires = bad. That's her terrain, slaying vampires, and she could justify Angel because he had a soul...but imagine what would happen if she based her slaying on which demons deserved it most? We clearly see that there are "good" demons..and if not "good," at least not outright evil. (Clem, anyone?) No more evil than Warren, or Caleb, or dark Willow, or any other human Buffy refuses to kill. It's arguable, actually, that some of the human beings we see on the show are more evil than any demon, especially since they DO have souls that don't seem to make a difference.
That's the thing, though. Buffy CAN'T do her job while acting as a judge of morality. It makes things too complicated, it gives her too much room to make mistakes. What if she kills demons who didn't deserve it? What if she doesn't kill a demon who does, and he in turn kills innocent people? In doing this, she would be very similar to what she tries so hard NOT to be. A human killer. I think as the series goes on, we the viewers understand that, when you get right down to it, there ISN'T a whole lot of difference between demons and humans. Sure, most of them suck, but they can make amends, they can change (Angel, Spike, Anya..). And, after all, all the demons on earth are part-human, anyway.
This is complicated, and Buffy chooses not to acknowledge it for the most part. Sure, she's been known to let a demon go because they were "harmless," and she refuses to kill Spike. I think deep down Buffy knows her job is more complicated than "kill demons, let humans live"...she certainly doesn't want to kill something that's more or less harmless.
But back to the topic...do they overreact about Spike's feelings? I do think that most of the time they put a LOT of stock on how Spike is feeling, even when it doesn't make much sense to (because he's a soulless, evil creature)...but here, I don't think so. Spike is impulsive, his feelings rule his life and by this point the Scoobies know this. They saw what he was capable of when he and Dru first broke up, and I think they were afraid of what he would do for unrequited Buffy love. The chip doesn't ACTUALLY "stop" him from doing anything. He could do what he wanted to Buffy and suffer through the pain later if it got to that point.