I think the key scene in Moist's transformation is the restaurant scene where he meets Gilt for the first time. Until that point, he's mostly playing the grifter's role in a legitimate setting, and his one-upmanship games with Gilt are more about ego than morality. But when he looks into Gilt's eye and see that Gilt has achieved his mastery of the game by abandoning any sense of morality (which Moist hasn't done; he doesn't fleece the poor), he realizes that becoming someone like Gilt is a path he can no longer take--there's too much 'good' in him to succeed. He's not averse to using Gilt's methods; he simply no longer is willing to do this solely for the joy of the game. Remember that this scene occurs before he learns that his actions resulted in Adorabelle's firing; he's already embarked on a new path; the fire at the post office, Groat's maiming, and his learning of Adorabelle's firing trigger the emotions of anger, guilt and righteous revenge that lead him to his final actions.