[On fantasy fiction with sympathetic demons as characters]

From my experience, when the Japanese do it they are translating their race of Oni/Youkai as another race of beings since they do not have the understanding of what demons are (Just as their version of God is usually just a guy who happens to have powers and can therefore be replaced) so I don't tend to take their stories to being about redemption for demons to begin with. They are never treated as demons truly are to begin with, but, unlike westerners, they also aren't doing it for the same reason. They see youkai as no different from dwarfs or elves.

Westerners, however, don't have any excuse for their swill. There has never been a story with an outright demon as a good guy that wasn't complete garbage (Milton is not the same thing, we all know what he was doing) because it always involves overturning Good and Evil in ways that turn the story into an incoherent mess. If you want to create an "evil race" of beings and have them be redeemed, you CAN do that; they just can't be demons, because that isn't what demons are to begin with.