Is it ethical to seek a PhD program if you suspect you may want only a Masters?
My background comes from Biology so I don't know the details of engineering graduate programs. However, a graduate student is a significant financial investment for the graduate program and advisor. For the student it is the time and emotional investment. Graduate programs that offer funding i.e. stipend and tuition waivers to PhD students do so because it will take the student 4-7 years of full-time+ work to complete their courses and dissertation work. They are typically expected to devote all of their time towards their degree and are discouraged from outside employment. Thus the stipend to cover living expenses. 

A MS program is typically 2-3 years and varies in requirements from program to program, ranging from just coursework to coursework plus thesis. 

The learning curve is steep for someone who has no previous research experience and the time and money that is spent getting the student up to a productive level is significant. In our program, PhD students typically advance to candidacy around the time that a MS student would be finishing the program. Before this time the PhD student and the MS student are working under comparable conditions. This is also the time that if a PhD student were to not be meeting minimum expectations then they would be denied candidacy and exit with a MS degree. 

There is less pressure for a PhD student to begin a project that will result in their dissertation early on because they have more time. MS students must find an advisor immediately upon entering the program and thus begin generating something meaningful if they are to complete and defend a thesis. The body of work is much smaller than a PhD student and is typically just a demonstration of their advanced breadth of knowledge in the field. 

Many advisors in my program view MS students as an extra pair of hands and receive less attention when it comes to mentoring. Their projects will often be small offshoots of a bigger project that a PhD student or post-doc is working on. You must understand that they are treated differently from the beginning not because of discrimination but because research projects take a long time to develop and often meaningful results do not come until a few years of work, which is too long for a MS student.

For you particular situation, I would say if you are unsure about which program is right for you I would say take some extra time to figure that out. Whether that means get a job in the area you are interested or something else. Just be sure if you sign up for a PhD that you really want to do it. It is a difficult and really trying path, not for the half-hearted. Even for those who are extremely passionate about their work will question their place there and consider quitting during the bad times. Going into a graduate program with a clear focus and interest (PhD or MS) will make things go much smoother. Do not expect to show up and someone tell you what to do, or you may spend 6 months to a year just floating along trying to find your way. 

Now selfishly speaking you are right, you could enter the program as a PhD student and feel it out, but in my opinion I would discourage you from doing that. You will likely waste your time and take longer to get your MS than you would if you went in from the beginning knowing you wanted an MS. You also risk soiling relationships that you could otherwise depend on to help you later in your career. Who knows if the advisor you picked will be angry that you left the lab with a MS when they were expecting a full 5-7 years of work out of you. The people I know who quit their PhD program often quit because the tough times made them realize they liked the idea of having a PhD but didn't really understand what it was going to take to get one. Make sure you know exactly what to expect.

Lastly, whatever you decide, pick an advisor very carefully. Advisors like bosses all have a range a personalities. Some are jerks that will call you during dinner time or saturday afternoon asking to meet with you. Some you will consider filing a missing persons report because you haven't been able to get ahold of them in 2 months. Make sure whoever you end up working with goes well with you.