We aren't talking about more badass, we're talking about more EVIL.
FF6 and 7 spoilers ahoy. And sorry if I misremember minor points of FF6's script; it's been years.
I think it's Kefka. Reasons:
Kefka, without a doubt, killed more people and took more joy in it than Sephiroth ever did. Sephiroth is known to have murdered two people, not counting the clones: President Shinra and Aeris. And no matter how much you may want/love/idolize/fetishize Aeris, that is not as devastating as poisoning the entire city of Doma, as Kefka did. And when it comes to widespread destruction, Kefka wins hands-down. Though Sephiroth WAS on his way to destroying the world, he never actually did so. Kefka did, wiping out half the world with the Light of Judgment and turning it into a wasteland.
Both of them were warped by circumstance (and science, in Square's usual science-is-evil, magic-is-good polarity, which only FF8 reversed) - Kefka was warped by the Magitek experiments, and Sephiroth by his original creation and probably by being brought up as a living superweapon.
However, out of those two, consider that Kefka probably chose to go under those experiments. All indications are that he was a regular general, like Leo, before being infused and going bonkers. Seph did not. He was screwed up from before birth onward. So, in that case I'd also tip the scale toward Kefka, for having had some hand in his own insanity.
Now, Hojo and Kefka might be a closer race. IMO Hojo is far and away the "true villain" of FF7; after all, pretty much everything that happened to Seph to make him so insane is traceable back to Hojo. He also orphaned Aeris and made Cloud the psychological freakshow we know and love.
Anyhow, sheer moral depravity, between Kefka and Sephiroth, Kefka absolutely.