The general public knows two things about Richard Wagner. One, he was a great composer. Two, Hitler loved him. Some have even commented that his was the background music to the Holocaust, which isn't quite fair, since Wagner died in 1883. And according to some sources, he wasn't even Hitler's favorite: Verdi was. Wagner was right up there, though, as was Beethoven; the Nazis played music by both at their rallies. But Verdi and Beethoven didn't publish theories as to how, for example, the music of Jewish composers could never be great art, because, as aliens or "freaks of nature," they had no access to "the genuine spirit of the Folk." You can see how that thought would resonate with Hitler.
If he'd known how famous he would become, and for how long, Wagner might have thought better of publishing essays such as "Das Judenthum in der Musik" ("Jewishness in Music"). This was originally published under a pen name, in a newspaper called Neue Zeitschrift fur Musik, in 1850--but he republished it as a pamphlet, under his own name, almost 20 years later, and he wrote other anti-Semitic essays as well. Wagner did have Jewish friends. He just thought they all should convert to Christianity and, for God's sake, blend in! He seemed to want to see the end of Jewish culture, not of the Jews.
In any event, Wagner is a poster boy for the question Can bad people create good art? It seems to me now that one has little to do with the other. I remember how surprised I was by how much the cold-hearted protagonist of Snow Country, by Yasunari Kawabata, loved ballet. In my young mind (I was about 20 when I read the novel), I equated love of the arts with sensitivity. It was wasn't much of a leap, then, to link sensitivity with empathy. But clearly, you can adore ballet and opera and hate humanity, or the Jews.
So a "bad" person can have good taste. But can he or she have the depth of feeling that underlies great art? My favorite literary critic, the late Malcolm Cowley, once wrote, "No complete son of a bitch ever wrote a good sentence." Some people think he was saying that bad people are incapable of creating art, or even of stringing words together well. I think he meant that if you can craft a fine sentence--perhaps he should have said "create a great poem"--then you cannot be a thoroughgoing cad.
Speaking of empathy and depth of feeling, Cowley also said, "Be kind and considerate with your criticism.... It's just as hard to write a bad book as it is to write a good book." And perhaps more apt, getting back to Wagner: "Talent is what you possess; genius is what possesses you."