As I understand it, they thought the gods needed the sacrafices to stave off the end of the inevitable apocalypse and turning of the cycle just a little bit longer. And yes the Spanish were pretty evil. So were the Aztec.
In the real world, everyone's the bad guy! We pretend our laws are fair, our wars are just, and our morals high. But in the end the rich and powerful crush the poor, war is just legal murder and our fanatics preach of fear and hate with toxic bile. But we're the ones doing it for the Greater Good, so that makes it ok!
Moral ambiguity and shades of grey and all that.
But in all seriousness if we start sacrificing people to the gods we are totally the bad guy. Just because it actually gets results doesn't mean we're not killing people for profit.
It would be a change of pace for a civ quest, and actually pretty fun to go full ham evil, but let's not pretend otherwise. If we're gonna be bad guys, let's be card carrying villains with an evil empire.