While experimenting on living people is certainly reprehensible, Hojo didn't do it on anywhere near the scale on which Kefka carried out his mass slaughter, if my memory of FFVII is correct. Just the quote, "Nothing can beat the music of hundreds of voices screaming in unison," implies that Kefka carried out mass slaughter out of sheer sadism. I don't recall anything connected to Hojo that suggested he derived enjoyment out of experimenting on people - he did it all out of a lust for power. To me, the word cruel implies that not only is a person a complete asshole, but he or she also takes pleasure in being a complete asshole. That, to me, makes Kefka the greater evil.