Quite a few years ago, there was a television show--MacGyver. It was pretty popular, enough for seven seasons which isn't bad in a competitive television market. Each week, he was pitted against one kind of villain or another. But around season five or six, the writers came up with a recurring villain named Murdoch.
In some ways, Murdoch made that show. You see, for season after season, MacGyver was pitted against villains that weren't quite as bright as he was so they had to come up with odd stunts and weird ways for him to solve problems with his trusty Swiss Army knife and duct tape.
But Murdoch... well Murdoch was more on par with MacGyver so the match was more interesting. The writers could come up with psychological situations and more open-ended solutions. Murdoch was the archrival that MacGyver never quite defeated.
So what's my point? In our stories, we need to carefully match our villains with our protagonists. If one or the other is too strong, too bright, too bad, too good, then the reader loses interest. The reader wants to root for the good guy, but if the good guy clearly outmatches the bad guy, then we are sending mixed signals. The bad guy becomes the underdog. In the same way, if the bad guy is far stronger than the good guy, we're signaling that he in fact is the alpha dog. There needs to be balance.
There are a number of ways to balance the equation. We can have a less than intelligent villain who has no moral compass. We can have a bright villain who has doubts. We can have a villain who is convinced that he is righting a wrong. But we must balance our villains and protagonists so that they are matches.
After a couple seasons, Murdoch's character disappeared. And when that happened, so did interest in the MacGyver character. He was too much. Too bright. Too good. Too moral. Strangely enough, we needed Murdoch to balance MacGyver, to give him doubts and make him question his decisions. That's a good villain.