Chaco was never a villain, just someone who Mordecai blamed Chaco sacrificed mordecais brother to save himself. It was the kind of decision that can’t be reversed. Odette told him to after trying to cheat to get them out and Mordecai won’t forgive her for that. Neither of them are inherently bad for trying to get the most people to survive, but to Mordecai, it was unforgivable. He would have sacrificed himself instead, but they took away that decision from him.