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I always interprated it as being about how no one is completely good; everyone has the potential to commit grossly evil acts if subjected to the right circumstances, and thus the Viet Cong are neither better nor worse than the Americans.
I seem to remember that what he says is something like they were moral enough to give them the right kind of motivation but immoral enough to be sufficiently ruthless to get the job done. In that context all "moral" really means is "motivated by their own morals", and that kind of balance can, I'm sure, be useful in warfare.
It's also important to remember that Kurtz is batshit insane.
I always thought that the point Colonel Kurtz was getting at was that in warfare it is insane to be placing objective morality of right and wrong on the battlefield where the point of war has and always will be to murder each other until one side is destroyed or gives up, petty preconceptions of morality shouldn't exist in war. The Vietcong and the NVA were willing to do WHATEVER it took to achieve victory regardless of the morality of their actions and didn't let "judgment" based on those societal/moral preconceptions defeat them, the Americans weren't and that is why Kurtz felt that the Americans were eventually going to lose the war. Americans were no where near as dedicated as their enemy, we may have been vastly more well-equipped than our enemy but to us it was just a matter of containment based on the larger Cold War, for the Vietcong/NVA getting rid of the Americans was a matter of life and death to which they were willing to dedicate every last man woman and child to defeat. Had America given such dedication the war would have been over in just a few short years. Kurtz realized that it is important to be a moral, good-natured person but at the same time be able to tap into your instincts and kill the enemy without passion, judgement or remorse, because that is how wars are won. Kurtz isn't insane, he is just realistic about how harsh war is and how harsh you have to be in return to win a war.
The above seems to be the most substantiated interpretation, as Kurtz places great emphasis on the fact that the Vietcong are motivated to commit horrible acts out of the deep love they have for their families.
Another important point is that, you know, the US Forces weren't precisely pure noble goody goodness. Vietnamese innocents were killed by the Americans, and the film doesn't shy away from the most immoral actions of the US. So it could be more of a "Everybody could be seen as evil in a war" thing.
It always bothered me why U.S Command sent a recently divorced and clearly traumatized veteran of the currently on-going Vietnam War on a top secret mission to kill a rouge U.S Special Forces Colonel. You would think they would choose another Special Forces guy who didn't have all these psychological issues to take the mission. Then I realized that the concept of Post-Traumatic-Stress-Disorder was only recently coming into the lime-light at that point and before that most Military forces around the world didn't care if you were traumatized by what you experienced, if your body is intact and you can fire a gun you are good to go. The U.S Military would be no different towards Captain Willard.
If they kept him, he would be nothing but trouble. If they sent him, he would kill the Colonel or get killed himself. Either way, one less problem
For the longest time I thought the part right before the crew enters Cambodia past that bridge was surreal just for the sake of being surreal. Then I realized that we are looking through the eyes and ears of Private Lance who is currently stoned on drugs, no wonder it was surreal.
While the plot of Apocalypse Now is essentially Conrad's Heart of Darkness, most of the scenes are taken nearly verbatim from a real-life, first person account of the war, whose title I alas cannot remember. The scene at the bridge is exactly as described, right down to the stoned-out M79 gunner killing the screaming VC with a single, instinctive shot in the dark. The movie was surreal because the war was surreal.
Fridge Horror: Many Veterans have cited this as an accurate portrayal of the Vietnam War.