Oh, I agree completely. With Dukat, DS9's writers and Marc Alaimo succeeded in creating a thoroughly nuanced, three-dimensional villain. You could see the guy's devotion to his daughter without ever doubting that he was an unrepentant fascist thug. You could understand his motives and still find him utterly despicable. DS9 managed to do this with the Cardassians as a society, too, but Dukat wrapped all of the contradictions up in one package.
I have to say, though, that I would have liked to see the Dukat arc end with his failure and mental collapse when Starfleet retook DS9. The season 6 opening arc made Dukat into a tragically flawed character in a sort of Shakespearean mode, and I thought his later conversion into Chief Satanist of Bajor was too cardboard and a waste of the character after his fall from grace.
It is by caffeine alone I set my mind in motion. It is by the juice of java that thoughts acquire speed, the hands acquire shaking, the shaking becomes a warning. It is by caffeine alone I set my mind in motion.
--Mentat Coffee Mantra