He wants Evil to be taken as Good.

I think it's the other way: he wants good people to be seen as fallible and fallen.

My model of him is like: "So when I tried to be the hero, people disrespected me, but for some reason the same people respect Dumbledore, Hermione, Harry. Why?! Oh, they are probably better at signalling. So let's manipulate them into difficult situations where even if they choose good, it will either ruin them or send bad signals."

He does not want to redefine the words with capital letters. That's a fool's game. He is just jealous that other people succeeded in having a good image, where he failed despite his cool plans. He wants good people to have bad image, so that he can become a person with the best image, which is his preferred way to rule the world; probably because it seems safer in long run than being an evil overlord.

I believe his frustration at his inability to become a credible hero. But at least he is learning. He has learned that "a single super-heroic action" is not a good plan, so now he is trying "a child with magical destiny" plan. He cynically believed that he could fool all people; now he is even more cynical, because he believes that he cannot fool them by something that makes sense (killing a few Death Eaters and saving a princess? meh.), but could do it by a superstition (to kill Voldemort while being a baby? cool, and nobody suspects anything!).