He made a mistake. Like I said, he's naïve. It's a big jump from naïve to incompetent. Hell it's a big jump from "he made a scientific mistake" to "he's incompetent." Incompetent is a strong word. He didn't correctly identify Jenova as an alien. What, exactly, would he have had to do to ascertain that she was an alien? As far as I'm aware, the story doesn't specify. Maybe creating hybrids was the only way he could have ascertained the story's true nature. Hell, just because she was an alien wouldn't have been reason enough to suspect she was evil. Calling him incompetent because he didn't recognise her true nature is... jumping to conclusions. From the information we have, we don't know for sure that he didn't run all the diagnostics he could have. It's not like there was tons of information about the Cetra remaining in the first place, if I remember correctly.
Gast putting Jenova under operation didn't lead to the creation of Sephiroth. Hojo injecting Lucrecia with Jenova cells while she was pregnant led to the creation of Sephiroth. Gast was not responsible for it. He started the research which other people eventually continued by injecting a pregnant woman with Jenova cells, but dropped out before it got that far. That's the most he can be blamed for it. Saying that he's equally culpable is silly.