It should be noted that the "regular" Empire was founded 685 years ago, but the Evil Empire as we know it, the Gestahlian Empire, was founded with Gestahl's father's coup d'etat 59 years before the start of the game. Before that, the Empire seemed like a pretty good deal, focusing on bringing people together to prevent another global war.

And yeah, all we know of Kefka is that he didn't go crazy until the unperfected magitek infusion process warped his mind. What he was like before that, who knows? But I generally agree that he probably was never a very nice guy, insane or not.