People who insist the Federation is evil generally do so based on the merits of the Federation, not the bugs.
Propaganda and militarism aren't inherently evil though- they're just tools used to rally a populace to combat opposition. In order to determine actual moral alignment, you're pretty dependent on the nature of the opposition said tools are being directed at. If it's directed at a bunch of hippy ET aliens, you might call that an evil governing body. If it's directed at a bunch of giant killer bugs that are doing nothing but shredding peopl en masse... well there really isn't a leg to stand on that such creatures aren't a threat to your populace and that you're evil to go after them.
That's kind of why this film is so retarded as a critique of fascism- yeah the Federation fucks up people's live and sure, Buenos Aires is probably an atomic bomb or something going off by accident that's being used as a cover to start the war- but when you see the bugs at no single point do you ever get an indication that these things would've left humanity alone had they in turn been left alone. Ffs, even when they're acting 'peaceful' bringing the captives to the big brain bug the thing immediately starts stabbing soldiers in the head and sucking brains out.