Here is why I feel Kefka works so great as a villain, and this goes more towards those of us who played it when it came out, or managed to go unspoiled.

The entirety of this plot is being driven by the empires ambitions. You find out early on in the game, When you get to Doma, that a big part of how the Empire is acomplishing it's tasks is by employing a madman like Kefka. Someone willing to do horrible, and unspeakable things and lacked any kind of moral compass. Ghestal just aimed him where he was needed.

By Flying Continent, Ghestal feels its time to eliminate his pet as it were. However Kefka turned out to be to much for him. Ghestal basically grabbed on to a madman thinking he was in control, and let his greed and arrogance get the better of him, and Kefka basically went fully unchained with Ghestal's death. This was a huge twist, and from a more symbolic then plot stand point, it clicks that it really was Kefka you were fighting against this whole time. It feels almost as if Ghestal was just incidental in this whole mess. He strived for order and unity, the problem was the sadistic lengths he was willing to go to. You fought against the pain, suffering, and loss. To that end, Kefka is the perfect foil for your party in a way Ghestal himself just could't hope to be, as great a villain as he was.

Kefka isn't great just because of his funny one liners, or the threat he poses (Those are good reasons to though), it's because there are few villains that so perfectly embody what it is you party is fighting against.

Though he's only my second favorite of the series next to Kuja.