Would it work at all to play a variant where the players form alliances, say good vs evil? How would one house rule such a game?

The question is: What is the goal of such a game? Do the allied fractions have to gain a combined number of dragon runes or will they win the game if one of them controls six (or epic seven) dragon runes?

Well, either one really, though I think the option of having a combined no of runes between them would probably work best.

I see no reasons why it should not work to play such alliances. However, I think some aspects of the game are more interesting when everyone plays only for his own: for example influence bids. If you can get sure that your allied partner will spend a lot of influence, there is no reason why you should bid at all.

Maybe you should houserule that allied partners can bid a combined amount of influence. The highest bidder will win, but he can be supported with influence from his partner.