I think Hojo was really desperate and crazy, and he was trying to mate Red XIII and Aeris. Even the characters (well, Tifa) think it's sick:

CLOUD: "What do you think you're doin'?"
HOJO: "Lending a helping hand to an endangered species... Both of them are on the brink of extinction... If I don't help, all these animals will disappear."
TIFA: "... animal? That's terrible! Aeris is a human being!"

Besides, it's not like Hojo didn't do other very sick and inhuman things to other people in the game.