I like the Citizens a lot. If I ever can build a campaign for the RPG, there are chances it will be from the Citizen's point of view !
Villainy is in the eye of the beholder… For me - I may be wrong - Citizens are Villains because they have plans that the Heroes can't accept. They are "adversaries" villains more than "for the evulz" villains like Blade can be…
It's a little like if Magneto had decided, early in his carreer to build a new country "for mutants only" rather than trying to conquer/wipe out the "normals".
They have built their own culture, their own sense of morality - and it conflicts with the way the remainder of humanity thinks. They enjoy (and are encouraged to) using their powers, they think of themselves as "better" than normals, they think they are the future and should be seen as thus by everyone else. I guess they consider themselves the saviors of super-powered humans, even if said super-powered humans don't want to be saved. They certainly are ready to do questionable things for the "cause", like kidnapping powered children for their own protection, or making big shows of power to make normals think twice about trying anything against their "country". They are racists, thinking non-powered humans to be primitive and unworthy.
How these opinions manifest, though, make the difference between "true villainy" and "different culture we may not agree with". Maybe they feel they have the "burden" to educate and govern the normals, with all the moral conundrums it may lead to… Or that they have to protect themselves from the normals in whatever way feels relevant. Or maybe they have plans to systematically eradicate the faulty normals.
Personally, I feel they just want to be able to live their powered life without interference from normals trying to "control" them one way or another, and that they are ready to be very violent to keep their lifestyles. Dawn seems to think that the best way to ensure the freedom and security of her followers is to take control of humanity before humanity tries to eradicate/control them. But I guess she doesn't act like she does because she is "evil" - but because she is protective of her country, her citizens, and the culture they try to build.
I always wanted to read a "One Day in the life : Citizen Dawn" Sentinel Comics, and see events through the eyes of the Citizens. Gimme that RPG now !
(note to self : build a Romeo+Juliet impossible love story between a Citizen and a hero. )