I think that's exactly why he's has a degree of gray though. We know he can be reasoned but he's not reasonable simultaneously because demons aren't good at all (like, without any shade of gray or racism there, they just aren't) yet he doesn't seem to truly rationalize that. Isaac is very much insane.
It's also fair to point out that he's beginning from a place of hatred toward humanity, so of course he's going to make the worst of almost every single interaction he has and never consider why people are behaving the way that they are towards him. Those two things confirm his biases, which anyone who has gone through negative bias confirmation can attest, it can feel oddly satisfying, even
good. Deep down, Isaac doesn't want to see things any other way, because that would require him to do two things he really doesn't want to do: admit he was wrong, and then change his ways.
He likes being who and what he is, so any evidence that he might be wrong gets marginalized or handwaved, and he overly fixates on how his treatment makes him feel rather than considering the reasons for it, and it's possible that he may be subconsciously choosing the path of worst resistance to confirm as many biases as possible so he can have "permission" to carry out his plans. He has also surrounded himself with servants who cannot disobey him AND tell him that he is right. The way Isaac is presented in this season is essentially a character study into human bigotry and intellectual fallacy, which is... timely, if nothing else.
When he dies, it won't be as a reformed villain, admitting he is wrong, but rather, seeing his death as simply the last piece of confirmation to his views, and I'd fully expect him to quote Nero:
"Qualis artifex pereo!"/"What an artist dies in me!" He really does see himself as a sort of anti-hero, raging against a corrupt system. Of course he'd ignore evidence that the system isn't actually that corrupt. Isaac will not stand to have his internal narrative meaningfully challenged, condemning him with the Sin of Pride, and blocking him off from any sort of redemption.