For all that people say the Domain was bad, I'm still not sure if we have any reason to believe that beyond story tropes about old, evil empires that came before. Ah, and Luddic teachings, of course.
Hyper-specializing worlds is not pure evil, they don't do it for evil laughies, they do it so you can't rebel - if any real nation could do that, they would do it in a heartbeat. Imagine you stopped paying your energy bill - is it evil, if they cut you off with the press of a button?
We don't know how their society was structured, but just because they were a gigantic empire, doesn't mean it was evil. We can see megacorporations existed and prospered under the Domain, but it was clear most of the power was still held by the state - so even in the worst case it wasn't a dystopian cyberpunk, with unfeeling profit being the priority.
We don't know if people in the core worlds were truly free, but looking at the fact worlds at the edges even rebelled at times, we can presume they had a lot of freedoms - they had to have them, to be able to build ships and weapons to fight. Not just guerilla warfare, but whole worlds rebelling.
Will I be surprised if we ever have confirmation that were EVILTM? Of course not, but with lack of any concrete info I prefer to think it was realistic - with all these perceived evils simply being a natural consequence of big nations 
And if you wish to be optimistic? They seem to be constantly advancing their technology, they could terraform entire planets and get nearly infinite energy by hypershunts. Post-scarcity society ala Star Trek looks possible.
I think we've definitely had it confirmed, from the Hegemony background, that the domain was
nominally democratic, with each world a democracy with freedom to govern its internal affairs, but from the lore about hyper-specialisation being an
intentional choice to prevent independence and the XIV group getting into trouble for mutiny when crushing a revolt it's clear that the freedom was only within the constraints of the, well, political hegemony of the Domain - and that many people chafed at those bounds. The Domain are very clearly authoritarian, relying on LPCs and the gate network to limit the autonomy of their population, and resisting the idea of coexistence with any alternative forms of political organisation.
So in that sense the Domain are
quite like the 90s/00s USA. Democracy and Freedom for you, but
only within our definition of them. Anything that differs is thus definitionally Undemocratic and Illiberal and must be sanctioned or liberated. Quite possibly they started out nominally 'good', using their advanced Gate technology to spread democracy to a human diaspora isolated by hyperspace, but it's clear from the Luddic lore that by the Late Domain era they'd turned into an authoritarian tyranny that focused mostly on perpetuating itself and its control.
This is actually quite similar to the background of Union from
Lancer RPG, where the First Committee set out to fill the stars with utopian interstellar colonies, then external undemocratic threats caused the Second Committee to seize power and try to enforce utopia at gunpoint with a gate network. The process corrupted them into an authoritarian hegemony. Unlike in Starsector, in Lancer the Third Committee overthrew the Second, and is (as of 'the current day') trying to thread the needle of peacefully negotiating people into its utopia, whilst dealing with the moral obligation to intervene against injustice with its near-Domain-level hypertech.
Starsector kind of offers the opportunity for a Third Committee-style popular revolution, that reclaims the hypertech for the benefit of the masses.
