While I am more unfamiliar with Nietzsche than I should be, I did seek out the essay you mention (although I think the second essay of his Genealogy is actually what you refer to), and I would say that Nietzsche is not really using an argument from etymology as I have described in this entry. Indeed, if there is an argument in Nietzsche’s discussion of the etymological similarity between the German Schuld – guilt – and Schulden – debt, obligation- it seems to be only an analogical argument comparing moralistic language to the language of creditors. I might also note that the English word ’should’ also derives from the same German word, and even the word ‘ought’ has origins in the idea of a legal obligation, of owing something. Nietzsche has the right idea here, etymologically speaking, and there isn’t anything wrong with appealing to etymology as long as it is used to reflect on how the word was used in that language and not as a way of persuading the reader that the original meaning ought to be preserved and the modern usage rejected.

Now I intend to go ahead and read Nietzsche’s Genealogy; I picked up Alasdair MacIntyre’s Three Rival Versions of Moral Enquiry once, which discusses the Genealogy, but I never finished it. Fortunately for me, the Genealogy is apparently available online.