He's one of the most influential villains of the series, as he is the first Heroic Spirit, which makes him responsible for most of the conflict in the first place and he is presented as a big threat to the heroes. He also is the most heinous due to wanting to wipe out humanity whole and commiting many murders and tortures, and is also implied to be a rapist according to Saber. Being the most powerful Heroic Spirit and as well as being highly intelligent and powerful, he definitely isn't a slouch when it comes to power. While he might have redeeming qualities, they don't migrate his villainy and while there are other powerful and influential villains out there like Zouken Matou and Kirei Kotomine, the former has a near redemptive death and the latter is a tragic and sympathetic anti-villain. Overall, due to having mostly the power and the influence, as well as being far more evil than Zouken or Kotomine, I think he perfectly qualifies for the status.
But again, what do you think?