No, we're upset because the demons in Frieren aren't ontologically evil, they're presented in universe as a sentient race with thoughts and emotions, but are "evolutionary adapted to prey on humans" and thus cannot be trusted.

I don't think I need to explain why this evolutionary psychology bullshit is fucked up in real life when real white supremacists and Zionists use that kind of rhetoric to justify genocide, and I think I'm entitled to feel put off when it suddenly gets injected into the comfy slice-of-life "contemplating the nature of time" show I had been enjoying up to that point.