Hinduism is definitely diverse and so are the views on karma (which range from ignorance to an intentional separation from God). Not having unnecessary attachments and desires is doubtlessly good for existing beings who are capable of experiencing positive experiences (which is why Mokhsa does not mean the elimination of being itself).
It is true that dharma (and most things in life) should not be seen in isolation. Right conduct is only a part of the bigger picture that also includes one's own well-being (kama) and even material resources (artha). Of course, dharma and moksha occupy a higher position.
The "problem" of existence, for a Hindu, does not have a specific beginning. A cyclical perspective is preferred, and each person's path is going to be unique. While the state of perfect existence (not existence) would certainly have been better than our flawed reality, Hindus (and Buddhists) would say that, now that the material world does exist, simply not creating people will not do anything as people will simply be created in another form (even if this takes some time). But having a human birth does give people their best chance to begin the journey towards Moksha in earnest.
Those who have already reached moksha will not suffer again. Instead, new souls will continue to be provided with the opportunity to gain liberation. Everything isn't about problems; some facets of life are also about what lies beyond them. Unlimited pessimism is an incomplete worldview.
The world would be a nicer place if we understood that having unrealistic expectations only makes us more miserable. I agree that it would be unethical to expect that everyone should adopt an optimistic perspective, but it would be equally problematic to suggest that it isn't just one's own existence (or the lives of some people) that may be mostly bad, but this is true for the majority/everyone. The existence of the negatives does not nullify the value of the good elements of life.
Deontological solution: Assuming that procreation can even cause any kind of harm (even though it doesn't go against anybody's existing interests and does not diminish their well-being), it would not be ethical to deliberately not give positives that one cannot demand before they exist. This is, of course, also depends upon other factors, such as one's economic conditions and other moral obligations.
Identity solution: Potential/counterfactual people don't receive any palpable benefits. Nobody is twirling in delight in nothingness. And if these are somehow apposite considerations, then the prevention of the lives of beings who could have experienced love, aesthetic value, and knowledge is nothing other than shockingly bad.
If nobody is deprived, there isn't anyone who is saved either. You give privileges to pessimism that cannot be justified.
There's a veritable mountain of experiences that cannot be hastily forgotten, friend.