Jeez if you read the script you can understand that he had much more then blood he found out about.
He started going crazy when Cloud asked if Sephiroth was built using the same process of these monster in the tube.

He actualy found out he was a Cetra and that the ppl now living on the world abused of his ppl, also his mother and stole the planet.
They EXTIGUISHED Sephiroth RACE ! (remember how Aeris is a Cetra too and her mother dumped her to someone to keep her safe?)
Thats what the planet done to the Cetra !
This all together is more then enought to drive someone to the other side.