Well... it depends on how one goes about ruling the world, doesn't it? Wanting to be President of the US, for example, is considered a perfectly normal ambition; and for an American to want to advance the interests of their country is perfectly normal. Would be pretty normal for a Chinese person to want to lead their country, and make it the dominant power of the world. Sure, a person could be privately cackling to themselves, but the drive for power is not considered that 'evil' in and of itself. Fair point about the movies having trouble resolving stuff in any way that isn't punching people.

Not having a leg to stand on is where we might get some interesting character growth, perhaps getting Tony to consider the question 'Is what I do okay?'

I don't think the Mandarin was mentioned by name. And I don't think it's wasting anything that useful, really - if anything, it kind of muddies the waters by entangling Obadiah and Mandarin.

I'd have to dig out the books, but I do feel that his characterisation is strongly tied to his ethnicity; I don't think he 'just happens' to be Chinese as Amadeus Cho, for example, just happens to be of Korean ethnicity.