They were not Evil for Evil's Sake you sometimes see. However. . . .
They are that old cliche the munitions makers who are the cause of war. One, actually, that I have not seen too much in more recent works. But it was real common among pacifist thought between the two world wars. As if wars were not considerably older than munitions makers being men of wealth and influence; the blacksmiths would have had a fun time ordering the warriors to go to war.
And a region being small principalities under the nominal overlordship of a king and often at war is also something that does not need evil priests to explain it. Even if the priests gave out their gunpowder to keep it that way, they would at least do some handwaving about making him the god of boundaries as well.
Now, small arms being better than cannon might be owing to the priests' influence, but I wouldn't bet anything too valuable on it.