Otherwise you could say the same for humans for Melkor also corrupted Men. You were already there when a few month ago we talked a bit about that. Yet ORcs have feelings, emotions. It is not impossible for them to have pity. I think they have free will, but their instinct is strong.
Selective breeding requires genes to select traits from.
No Saruman simply cross-bred humans and Orcs. This is a complete paradox. Think a bit. If Sauron know about genes, then the Valar and other MAiar know too. Our science cannot fit into Arda.