The whole backstory of Sephiroth, as mentioned, is pretty decent. The "Cloud's Past" section is amazing.

The problem lies in, as also stated, the fact this backstory was rendered unimportant.

Sephiroth as of Nibelheim: Thinks he's doing the right thing. He's avenging his "Mother" because the humans are responsible for her and her race's destruction.
Well, to an extent. More like they sat back and let them get destroyed. (according to what he knew)

Sephiroth as of FF7: KNows he's not a Cetra. Jenova was the one who wiped out the Ancients and humanity is relatively innocent.
He...just doesn't care.

Sephiroth could have been a good tragic villain. Why do you all think the Jenova controlling Sephiroth theory wa sso popular? It gave him some actual depth. The guy was misled and used by the most evil thing in the universe into thinking he was doing the right thing.

But alas, reality is always worse than fantasy. In reality, Sephiroth just gave up on any pretense of nobility. Now he just wants to be a god.
Whooptydoo, Sephy my lad. You went from Interesting to Bland pretty quick there.

Also Yu Yevon wasn't a bad guy. Least not nearly as bad as Kefka.