That breaks down is in a very simple problem in that the Jedi... actually ARE a state power. They ARE an institution. They ARE an arm of a late stage capitalist power. They ARE the Catholic Church.
Remember, Jedi philosophy is not based off Bhuddism or Judaism or even Christianity. It's based off the Freudian rambles of a misogynistic weirdo from the 1940's.
The problem is much of Star Wars buys into the hype of the Jedi whole-heartedly. It's only the Prequels, KOTOR 2 and SWTOR that engage with any moral greyness in the Jedi-Sith war.
Characters will often articulate a lot of great criticisms of the Jedi Order, but the unspoken second half of those critiques are all "And that's why I'm now helping the mass murderer commit galactic genocide!" Virtue in Star Wars in inextricably linked to the Jedi Order, just as vice is always the domain of the Sith.
On a Watsonian level, the Jedi are the quintessential good guys. Why? Because the story said so. On a Doylist level, they are just a religious organization that submits to power.
Now real world religions have these things called "Denominations" because the longer a religion lasts the more people split off from it on fundamental disagreements. But the Jedi and Sith never have more than one active denomination at a time. There's no diversity of thought among the Jedi. You're encouraged to view the Jedi as a monolith... because they are an extension of the monomyth.
I've said for a while the Jedi and Sith codes are wildly open to interpretation, and I've given a thesis before about how the Rebel Alliance embodies the Sith Code to a T. But Star Wars doesn't really do that. Honestly it doesn't really examine the Jedi or Sith Codes at all. You'll recite them in different games, but you're never asked to explain what they mean. Because their creators don't even know what they mean.
The Jedi and Sith don't really have a guiding philosophy beyond "Emotions Bad, Emotions Good." My own work with Star Wars was fundamentally about how the Jedi and Sith cannot continue as they are. They must change. They must evolve. The Sith by rising from the ashes of genocide as they had once been long ago, and the Jedi by evolving beyond their restrictive and apathetic past.
But the real meta-commentary is that they both have to stand for something. ANYTHING. Because in current canon, they stand for nothing. They're a big empty space reading "Insert Good/Evil Here." And that Good/Evil is largely defined by deeply capitalist corporate monopoly.
Always remember: The Empire and the Republic were not separate entities. They were the same thing.
Palpatine didn't turn the Republic into a corrupt, imperialist state. It already was that. It had been that for centuries. The Jedi fundamentally served the Republic. And the Republic was not a bastion of goodness. It was a wealthy nation that exploited the shit out of the rest of the galaxy.
The Jedi, being the epitome of Lawful Neutral, could only ever be as 'good' as the Republic it served. The Jedi stood for Order and Peace. And there is Negative Peace vs Positive Peace.
These are ideas that people in the real world struggle with, I'm not surprised Star Wars of all things struggles with it.
This is all meta-critique, on how the story is written. So no amount of "But in the movies-" is going to really refute this point.