Here are just a few reasons why Sephiroth is better than any other  bad guy:

1: His Hair, Clothes and Weaponary, every part of him is cool. The Mausarme looks the coolest out of every sword in the game.

2: The whole atmosphere that surrounds him is of complete and utter respect, no one dares put Sephy in his place (except maybe Cloud).

3: This bloke has been in S.O.L.D.I.E.R. and fought in wars and survived. That's like a Buisness-Class ticket to Cool.

4: The way he acts superior to every one around him, no one is better.

5: He's not one-sided, he isn't the sort of bad guy that wants to rule the world, he does, but it's more complicated than that.

6: Cloud is a clone of him, the hero we aspire to is a mere copy of Sephiroth.

7: He killed Aeris.

8: His final form is pretty cool, when he's an angel-like thing. Not as cool as normal but cool enough.