comic actions, ineptitude and bumbling does not excuse prior actions. i know you don't hear this very often, but you are wrong. Smith is evil.
A character who's "just evil" is far less interesting than a character who has nuance. I don't know why you want him to be uninteresting. Heck, he was less interesting when he became a one-dimensional buffoon later in the series. The only time he really was interesting was in the early episodes where he was ambiguous and conflicted, where he had the capacity to go either way and it wasn't clear which choice he'd make.
After all, that's how we got onto this subject. The question was raised about what had made the Smith character interesting in the first place, and how he could've worked as a character with sufficiently good writing. We're not having a conversation about morality here, because Smith is a fictional construct. We're having a conversation about writing and characterization. And good writing means complexity and interesting motivations, whether the character is a hero, a villain, or something in between. Just calling someone "evil" is avoiding the question of what motivates them. Maybe a character does evil things, but why does the character do them? What is their reason for choosing to act in an evil way? And does that motivation mean they have the potential to be redeemed, or to do good as well as evil? There's a whole spectrum of villain types, some more "evil" than others, some more redeemable than others, and with many different reasons for choosing to do evil.
And that's the point I'm making. I'm not trying to excuse Smith's actions, because -- again -- he's imaginary. I'm just giving my assessment of what motivates him as a character, which is that he's driven by self-interest, greed, and cowardice rather than deliberate malice or cruelty, and that while he is willing to benefit at the expense of others' safety or survival, there are limits on his capacity for outright violence. Calling someone "evil" implies, at least to my ear, that they want to do harm to others as an end in itself. And that's not Smith. He's merely selfish and short-sighted. What he wants is to be safe and comfortable and rich, surrounded by sybaritic pleasures and intellectually stimulating companions. If he could achieve that without harming anyone, he'd do so without hesitation. But Aeolus 14 Umbra offered him a chance to achieve that by harming someone, and he was self-absorbed and greedy enough to agree to that so long as he could do it from a distance and not have to see it happen. But when he was forced into a situation where he actually got to know his intended victims, he found he couldn't actually be the assassin that he'd been hired to be. Not only did he lack the courage and ruthlessness to kill face-to-face, but he'd actually begun to like the Robinsons, and to recognize that he needed them, that his self-interest was best served by keeping them alive. And so the man who had been hired to kill them ended up saving them.
Now, isn't that a more interesting story than just "He's evil?"