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1. Entropy is the total number of ways in which a system can be arranged. Intuitively, this is recognized as disorder, not nothingness. Now energy becomes unusable as entropy increases (which it always does in a closed system) and that is what is meant by your phrasing of "nothingness."

2. Entropy only must increase in an closed system (the universe.) This does not mean that locally entropy always increases. In fact, the existence of life, and other forms of order refutes such a premise. You are right, there is a cost, and that cost is energy, and that energy must come from somewhere. The energy is only changed though, not destroyed. In a closed system greater entropy => more unusable energy (as a percentage.) In an open system this is not the case though.

*This is where science ends, and philosophy/ethics/social science begins.*

3. "Good"and "bad" are subjective values partly based on human nature, but also based on individual variety. There is no physical natural preset of what is good and what is bad, only a human one. The connection with entropy (a physical model) you are trying to make is quite confusing to me. You involve a discussion of scarcity, which seems more relevant to economics and praxeology more than physics. Physics says nothing of "good" and "bad."