I find that both can work in a fictional setting, especially with more outlandish and explicitly magical beings. The idea that a fiend will stop being a fiend and become something else if their alignment changes is a good example of how a creature made in part up by planar energies can be "inherently" good or evil without it being a problem. If anything, it can open up for a lot of interesting storytelling or worldbuilding.
I think it is more problematic to have mortals be "inherently" evil. Mortals aren't really "essential" like a planar creature might be, because a Drow that changes their alignment would still be Drow. Mortals are also very much a result of their material conditions. Orcs being hostile with humans can be easily explained without making them inherently evil simply by the fact that these groups are in competition over land and resources. A competition that humans have largely won, making it difficult for orcs to establish a stable society that furthers social and technological progress. And as humans leverage their better position more and more, the harder it will be for orcs to establish themselves apart from them.
Continuing with orcs and humans, let's look at a specific example: The Elder Scrolls. The Orsimer have been in conflict with their human neighbors for most of their history in Tamriel and the emerging human dominance of the continent under the Skyrim Conquests, the Alessian Order, the Reman Empire, and the Septim Empire meant that building a civilization apart from humans entirely just wouldn't work. Humans were everywhere orcs had enough numbers to become more than minor tribal groups. So they were perpetual outsiders, often clashing with their neighbors and orcish warlords who amassed too much power (Orsinium) were invaded to prevent them becoming a threat. Then an orcish leader who was both willing and able to make a place for the orcs under the dominant human forces emerged; King Kurog in the Alliance War and Gortwog gro-Nagorm during the Warp in the West.
So what changed? Orcs went from being tribal enemy creatures seen as little more than savages in early games to become members of Tamriel's society, where the Imperial Legion in particular has found a new appreciation of their martial culture. The sacking of Orsinium in the early 4th Era also show that the bretons and redguards are just as responsible for much of this cycle of violence as the orcs were. We also see the orc strongholds in Skyrim live in relative peace with their nord neighbors for a long time when this change happens in the 3rd Era.
There are other situations and interactions in a world that might throw additional difficulties into certain people getting along. Mind Flayers, for example, are dependent on eating people's brains to survive and have natural psionic abilities. They also have behavior similar to that of a hive-mind, even if it isn't absolute. This means that living alongside Mind Flayers would be virtually impossible on anything resembling a larger scale.
Don't you just hate it when people with dumb opinions have nice avatars?
