That's similar to how I always envisioned it- the evil gods are willing to go to greater lengths to achieve their ends, but they (and their servants) also don't cooperate nearly as well and have a tendency to betray each other at the first opportunity.
Edit: Reading the rest of the thread, that's what the OP decided to go with, I think.
LotR and Middle Earth being the most well-known one, I think.There are also a couple of settings in which all gods are good, except for a single very powerful one.
In my own personal cosmology that I prefer to use, the gods mostly embody somewhat abstract concepts, and the most powerful is the god of power and ambition. But he's not destroy-the-world/chaotic-evil, and the runner up on deific power-level chart has a real hate-on for him. She would gladly fight him to the death, but he won't engage her in that manner because it would leave him weakened and vulnerable.
So essentially, the good deity doesn't have the power to destroy the evil one outright, and the evil WON'T put himself on the line to destroy the good one.
That's how I chose to explain it.