How sympathetic to make your villain depends heavily on what your villain's role in the story is. Once you're able to figure out what role he has, what effect you'd like him to have on your audience, I think you'll be able to see quite easily whether that role demands reader identification (and how much).
The villain always causes trouble for the protagonist. But what trouble he causes - what type; for what motive; most of all, why it's powerful, effective, and painful - this is what defines the villain's role. Is the villain threatening because he represents all-consuming evil? Or because he demonstrates just how easily the protagonist could slip over to the dark side? Is he fearsome because he's willing to kill thousands of people with his doomsday device - or because he's able to traumatize a single individual due to their warped, dysfunctional relationship? Is the villain a friend who betrays the hero, a foe who wants vengeance against the hero, a massive power who is callously apathetic to the hero and his friends? Each of these tilts us to strive for a different measure of reader identification and sympathy.
Here's a few guidelines on what the different extremes can be good at. This is hardly an exhaustive list, but I think the examples here will help you figure out where your own villain stands.
Low Reader Identification
- Good vs. Evil: Lots of stories are simply a conflict between A and B; A is good and B is bad. Fantasy and action stories can work really well with this framework - it justifies the plot and moves it forward, and doesn't really need any justification beyond that. The villain's personality is simply not the focus. Examples: Sauron; Darth Vader;
- Faceless Evil: If the enemy is a vast corporation, a dispassionate machine, or even an uncaring society, then the fact that we can't identify with it is the entire point. Here you actually go to great effort to stress how callous and nonsympathetic the enemy is. Examples: ST:TNG's Borg; the ministries of Brazil and 1984; Batman's cruel, corrupt Gotham City.
- Alien Mindset: Similarly, sometimes the idea is that something is so alien to us that it is entirely incomprehensible. Here, too, you need to stress the incomprehensibility - make clear that this is not an issue that can be bridged with sufficient effort and understanding. Examples: the Cthulhu mythos, the fae (e.g. as portrayed in Jonathan Strange and Mr. Norrell or in Pratchett's Lords and Ladies), Batman's Joker.
A major problem to avoid here is an implausible villain - a bad guy so mindlessly, pointlessly evil it feels exaggerated and false. Another thing to watch out for is character depth dissonance - in other words, if all your good guys are complex, believable characters but your bad guys are simple caricatures, they might feel mismatched. The bad guys feel false simply by comparison.
High Reader Identification
- Complex Conflict: The opposite of Good vs. Evil, many stories place great importance as portraying the villain as a realistic, understandable character - perhaps an antihero or even full-out heroic in his own right. Such stories try to avoid simplistic or arbitrary divisions into "good guys" and "bad guys," and generally work to stress that such divisions are inherently flawed. Examples: Martin's Song of Ice and Fire; Dexter; Batman's Catwoman.
- Tragic Conflict: The above point - that your enemies are sympathetic and generally trying to be OK people - can quickly turn to the tragic, particularly if you start killing each other. Evoking sympathy for the villain - even partial sympathy - makes the conflict tragic rather than triumphant. Examples: The Buggers of Ender's Game, Gollum in Lord of the Rings.
- Misguided Evil: Sometimes a villain represents a particular ideal, worldview or character trait, perhaps taken to an extreme. The story might demonstrate the destructiveness of that element, showing the villain to be misguided. In this case, some identification with the villain is necessary for the reader to understand the villain's case, or to demonstrate how tempting or compelling this viewpoint can be. Examples: Magneto in X-Men, the pigs in Animal Farm, Dukat in ST:DS9.
A major problem to avoid here is to make your villain overly sympathetic - if readers feel that a villain is partially justified, perhaps merely misguided, then they might not condone the protagonist's conflict against him. They might be in favor of opposing him, but "extreme measures" - such as killing the bad guy, or otherwise harming him greatly - may feel cruel. This can make epic climaxes very difficult.
For your particular story, I don't know precisely what to recommend without knowing more about it. You want rich, complex character dynamics, so maybe the villain should be in on that. On the other hand, "Ruthless Macho Killer" sounds more of the stone-cold evil type, and that's extremely appropriate for crime fiction. See where on this spectrum you think your villain belongs; if you're not sure, I hope I've given you ideas for what kind of direction you'd like to take his role. Once you know that, I hope I've given you enough to answer your question.