Well, who says he was 'good' to begin with. He might have always been a cold calculating SoB, but a SoB who through luck of birth ended up on the side opposing the Empire. When he got his chance to join up he took it.

Likewise he knew that this Demon King business was all bad news, and his highest priority was to stop it. So he joined up with you.

Seeing as I have only been through FF2 once my memory is a little sketchy on the details (that, or they could just have not been there). Did he show remorse for his actions, or did he just kind of go silent when it came up? I mean, at the end when everyone else was celebrating he could have been walking away to go back and reclaim his Empire.