The problem of a PC feeding puppies to counterbalance unrepentant murder is the biggest problem, as pointed out. I can think of two potential fixes to this:
Acts of conflict can only be canceled by equal (in magnitude) acts of serenity. This can still be problematic, but at least directs the PC in the right direction of not trying to game the system with easy tasks.
Alternatively, when a PC performs an action (or several acts in short order) that scores them a certain amount of conflict, they cannot gain any serenity until they spend time and effort to repent for what they did, or something to that effect. This can be by trying to fix or mend any damage done, taking punishment for their crimes, seeking forgiveness, extensive meditation and self reflection, and so on, at the GM's discretion. A penalty would be required, such as having to spend strain to generate from light side points, or generating less light side points on a roll.
I still think that using the dark side should at least have a strain cost (unless they are a dark sider, in which case the opposite applies). It always seems to me that whenever we see a character using the dark side on screen, they are at the very least slightly winded afterwards. The dark side affects a person adversely, even if the effects are not immediately obviously in the short term.
Keep in mind that strain is a cost, not a penalty. Spending strain is the price other non-Force sensitives pay for using talents, maneuvers, and so forth, so I don't why it should be viewed as such.
Reducing the ease at which a character generates serenity may also work (about half as much opposed to conflict, roughly?).