You should not be moralistic in thinking about international relations, because that is not foreign policy makers think.
You mean, we wouldn't be able to fund the radical Islamists that went on to found al-Qaeda and the Taliban, contributed to inspiring (and later more directly assisting) fellow Islamists elsewhere, including those who later became al-Qaeda in Iraq before becoming the Islamic State in Iraq (then the Islamic State in Iraq and the Levant, then simply the Islamic State.)
> You should not be moralistic in thinking about international relations, because that is not foreign policy makers think.
All decisions about priorities boil down, at their root, to moral preferences.
Now, whether the cost of supporting that regime is justified by either its actual utility or the reasonably anticipated utility at the time the decision was made are different questions, but you can't really fully discuss the decision without considering its actual rationale.
But at that time, the US had both India and Iran as friends. Having Pakistan as a friend to plug the gap between them seems like a less important goal, especially if it comes at the price of alienating India.
The thinking may have been something like: India isn't going to go into the Communist orbit even if we offend it, because of their border trouble with China. But Pakistan might. So it's more important that we keep Pakistan as a friend than to keep China.
Americans had the attitude that if you aren't with us, then you are against us. Plus India had a socialist economy
Right, to use Pakistan as a tool in the Cold War, which was also a stupid and self-serving enterprise.