Inspiration from a Dream: Kefka's Quest

I think it has potential on multiple fronts. I think my favorite would be a Cthulhu Saves the World-style story, a game in which Cthulhu journeys to save the world so he can be the one to destroy it.

Alternatively, what you described sounds a bit like chapter six from Suikoden III, where you see the game through the eyes of the antagonists. I like this idea too, though I think it would be pretty short depending on how much of Kefka's history the game would explore.