The Handmaid's Tale has spent much of Season 2 adding nuance to their "evil" characters. Serena Joy, for instance, has been given a surprisingly sympathetic edit this season, both in terms of being just as much a prisoner of her husband as Offred and during the trip to Canada. This only made the shock of her proposing to have her husband rape Offred and being an active participant, in hopes of stimulating the baby's arrival, all the harder to digest. But what about Aunt Lydia? Is Aunt Lydia good? Much like Serena, her edit this season has made her a far kinder character than one might expect.
Part of the problem is this notion of a character as "good" or "bad." Offred is supposedly a good person, right? But if you ask Luke's first wife, and told the story from her perspective, June would be a selfish, monstrous figure who stole her husband away, had his baby, and paraded it around town. Luke would not be the man working to get his wife back from a country who keeps her in captivity. Instead, he would be presented as a man who abandoned his rightful wife for a woman with a working womb.
As Obi-Wan says, it's the truth... from a certain point of view.
What is Aunt Lydia's point of view? She's a deeply Christian woman. She believes, down to her bones, that children are our most precious resource because there are so few of them. Her perspective on life is: "Babies, above all else."
Women who can have babies must work in service of their country to bear as many as they can. But unlike, say, some of the Christian conservatives today, Aunt Lydia doesn't stop caring about the baby the second it's born. She absolutely does not want women living at the poverty line to be overwhelmed with babies. Nor does she want babies raised by people who have the wrong values. She wants those babies who are born into this world to have every advantage, including a good home, parents who can afford them, and a moral upbringing.
From that perspective, the system of having "fallen" women have babies and give them to those who are righteous and wealthy is just practical. The emotional abuse aspect is merely "difficult times to be smoothed over." It's important to note she believes Serena Joy is misbehaving just as badly as Offred half the time. In her view, neither is handling the rough emotional patch of the actual building of the mini-human from scratch particularly well.
Lydia's "babies above all" attitude comes to the forefront most sharply with Janine, when Charlotte gets sick. Lydia isn't hesitating to let Janine see the child because she thinks it's wrong. It's because Janine is a perfectly healthy breeder, just as long as her fragile mind doesn't collapse. Lydia's fear is that Janine will snap upon seeing the baby, and never recover, losing a perfectly good baby source.
It's also why Lydia doesn't argue when she hears Offred say Serena wants to send her away. An emotionally-smooth household is what's "best for the baby." If Serena says Offred must go, out the door it is.
But Lydia's not a monster about it. She understands Offred is genuinely scared for her baby's well being. Though her position is such she cannot say a bad word against the morally upright and wealthy family that receives the baby, she hears Offred, and you can bet she'll watch over the baby and keep it safe.
Is Aunt Lydia good? If you asked her, she's doing exactly what this country needs, sacrificing and working hard to make the system work. Babies, after all, are the most important resource.