I think trying to find the moral pros and cons of a continued republic is kind of a waste of time. It can be argued, yes, that the republic wasn't democratic as people like to imagine etc. etc. But that was the age it was in.
And as for the empire, well, besides political stability (at least at first), I very much doubt life was much "freer" for your everyday Joe Toga.
The switch from oligarchical republic to autocracy affected the ruling class most. Inasmuch as the ruling class was also the officer class.
Which brings me to my point, which someone already made, that the republic is destined for some kind of self-destruct.
Its entire system was to percolate the best of the best further and further to the top, and creates a sense of competition that I do not think we can really imagine. So, ultimately, if you have a finite arena (the Mediterranean) and a group of people who all have to outdo each other. Conquests get greater and greater. Booty must be more and more. Provinces are abused and pillaged further and further.
All that said, yes, you could have a republic....but it would have to stay small, always hemmed in by external forces. In this way the "nobiles", as the Romans called their multi-class aristocracy, have someone to fight but never reach that critical mass that sees the era of over-mighty generals who, in their glory, can command loyalty unto themselves instead of the state.
And a necessary part of the above, of course, is the maintenance of the yeomen. Without that....the system breaks down. Voting, loyalty, worth, obligation, citizenship...it was all tied into being a co-owner of land. All landed men, rich or poor, are literally stakeholders in the republic and have a reason to be loyal to IT instead of HIM (general, emperor, etc.).
I try to remember when reading about these ancient states that, in a sense, these things came from the mists of time. It wasn't like, say, the U.S., sitting down and deciding to formally create a nation-state, drafting it all up and thinking about it abstractly. For the primitive Latins on Rome's hills, the world at large was out to get them. Only by banding together and common defense could they survive. "My property is safe only if I agree to not mess with yours, and if a Sabine rolls in we will both fight him." Hence the landless had no part in it. If they chose to live in the city, all well and good, but the "public thing" -the republic- has no obligation to take care of them. (Until later when it was do or die, but that's another issue)
There are some good books on the subject of identity, civic integrity and the roman concept of the republic out there. I'll try and find the names. Several scholars have noted that in archaic times, the Roman legal system literally took the stance of inside the walls is the nation, outside the walls is "war", chaos, nothing. Or something to that affect. I will try and find the book and quote it more properly.