King Piccolo believed that goodness in humanity is only a result of the laws they are bind to, that if goodness was removed from the laws then humanity's true colors would show itself, which would then lead to chaos and carnage. If humanity really didn't desire evil more then Piccolo's rule would not lead to chaos, because Piccolo allowed humanity to live as they want only without goodness to bind them. His relationship with Kami added to the greatness of this because it meant that he was doing all this as a big middle finger to Kami, to show Kami that humanity isn't worth saving due to their greed, and that the power to manipulate humanity for pleasure is the only worth in having power over them. King Piccolo had a big impact on Kami. As shown by him making no attempt to stop humans because of how evil King Piccolo showed them to be and him being sceptical about recreating the Dragon Balls due to human greed until he met Goku, who showed Kami that as long as they're still human(s) out there without evil, it's still worth helping them. Kami, after witnessing King Piccolo's return and his son, felt that his evil side had the biggest influence on his desire for becoming Kami, which made him feel he had no right to be Kami or even live for that matter.
The whole dynamic between Kami and Piccolo was fantastic storytelling and one of the best things about Dragon Ball.
I went even more in-depth on Piccolo and Kami's relationship here:
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