"he's a sanzo monk, so can he really be so evil?"
On the other hand, he was an unsanctioned sanzo monk, right?
There certainly isn't much proof of Kanzeon being a particularly nice character, no. I was just thinking yesterday about the heaven in Saiyuki, and how the supposedly enlightened (if I've understood the system right?) gods there don't seem particularly...well, the ones we've seen have acted pretty much like regular humans, I'd say.

I find Koumyou the only character harder to interpret in Saiyuki than Nii, which is pretty damn mysterious.
One theory I have is that all we know about him is basically through the memories of either Nii or Genjyo Sanzo. So I've also wondered how much we can trust their "testimony" on the matter. After all, Genjyo was a child who probably idolized Koumyou at least to some extent, whereas Nii...I'm not entirely sure what he felt about Koumyou. Reading the relevant Burial chapter once I wondered if Ukoku was actually a bit afraid of him, but I really couldn't tell for sure.
So, that's just my two cents. >_>;