He had two problems: Like he said himself in this episode, he wanted everybody else to be worn out by war so that they could pose no threat to Konoha, let alone form alliances. That's a super pessimistic and dark policy. On the other hand he wasn't purely looking after Konoha, he was looking after his Konoha. That's something that has been proven multiple times throughout the show. He doesn't care if Konoha suffers a little, as long as the suffering makes it more like his ideal village. He was a tyrant, nothing more.