FTW alliances go red early because if you don't have land, you are severely disadvantaged in the contest (if there is a contest) for rank 1.
Land = troops = the win. Of course there are other things that will impact whether or not you win (activity, contactability, skill, participation, luck etc) but most of all if you don't have enough land to tech/buy troops, you aren't going to win.
The only way to gain enough land to stay in first and maintain the lead is to hit targets you *know* you will land on. If you send out 3 attacks in flakwars without intel, and land on 2/3, then you'll resend on the 2 you landed on, and pick a new one for your third. The goal is land at any cost; not green titles. Land will get you the win, green titles won't. It really is that simple.
The game is fundamentally about winning, and land is a vital component in winning. So negative titles are practically a given for the winning alliance in the early round. Besides which if you battle another alliance for first, you'll be sending mass attacks, rushing, repeat attacks, bashes etc. I can't remember if declaring war changes the "negative" nature of your attacks, and makes them more honourable (or at least less negative) but wars will balance out your H/F until you start to win and repeat attack on your defeated enemies, and voila: Negative Title.
The game pretty much requires an alliance in the rank 1 spot to be Dishonourable. If you make negative titles have even harsher penalties, you're only going to discourage players from playing again which is not something we need. Granted, them bashing people at 30% range isn't increasing the playerbase either, but that doesn't mean you need to further increase the penalties. Players who want to win, will always use whatever methods they want to win. The mechanics practically guarantee a rank 1 alliance with a red title. Blame the gameplay, not the players. If you want rank 1 to be honourable, then make all attacks gain honour. Simples.