Even at his worst, you can't get away with calling him psychotic because he is right...mutants are GENETICALLY superior and the next step in evolution. And humans started the fight with Magneto long ago..he started wanting to work with them...wanting to find Nazi war criminals until they basically called him a "Mutie" and dismissed them in their effort to outlast Russia(I, Magneto). It was a costly mistake and turned him into the most infamous "terrorist" in Marvel history.Magneto, the racist zealot does not work as a X villain. While it's his original portrayal, the Claremont version is the most popular one and the one we see adopted by the movies and cartoons. (Although we've seen some writers revert back to the psychotic mass murdering version)
Magneto is a much better character and works as the X-men's polar opposite when he's either acting in retaliation or even if he's being preemptive, it is to save mutant lives. Remember he is supposed to be the alternative to Xavier's dream. So his stance must be one that is plausible. Remember he spent some time with the X-Men and even lead the New Mutants.
If you really look at the mutant related events in the MU Magneto was right to be more aggressive towards humans.
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Magneto tried to kill humanity like a thousand times over, breh, how is he not evil? At best you can say that he fights the wrong way for the right reasons, and that's stretching it.

