Or maybe there aren't actually any knights left (apart from Sir Leon and Arthur) and all of the red cloaks we see are the castle guards.

Merlin: making very little sense since it began. :-)

And actually Merlin himself is an odd duck. Because he very definitely hasn't allied himself with the other magic users, in fact he rarely shows sympathy with their motives, but with Camelot and Arthur. If I was being kinds I'd say that a lot of the WTFness of the show's morality stems from that. But again, its a case of the writers not bothering to stop and think once in while about the message that they are putting across.