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I was thinking... what's Kyuubey getting out of this? He's not taking their souls, just moving 'em around a bit. He only eats the seeds after they're used to soak up some corruption from the soul gem. Either he's a unique trash disposal (inb4 Kyuubey trash can that opens on his back), or he's getting some sort of evil power from those evil seeds. Or maybe girls sins just taste delicious.

 Spoiler

Kyuubey falls somewhere into lawful or chaotic neutral in morality. Kyuubey seems evil because of how he seems to be constantly pressuring Madoka to become a Puella Magi and his indifference to potential danger to the Puella Magi such as the fight between Sayaka and Kyouko, but in reality, Kyuubey just lacks human compassion and seems confused about humans. The incident with Sayaka's Soul Gem in episode 6 demonstrates is a very good example. The only thing he cares about is to make sure there will always be a supply of Puella Magi to replace deaths and so forth and can effectively control the witches in a region, which makes him lawful.

I genuinely do think that Kyuubey himself does not want anything out of making little girls battle the witches, but it's possible that Kyuubey is only a servant who answers the true "Devil"/Mephistopheles figure of Madoka if the Faustian ties mean any thing.

There's a few interesting ideas I've considered when it comes to the Grief Seeds, though; but they'd require other theories to be true.

A somewhat popular theory is that the witches are actually fallen magical girls. Some of the things that hint towards this are that Grief Seeds= G.S.; Soul Gem= S.G; the two being reversed initials of each other. If this is the case, it's possible that Kyuubey is doing this whole magical girl thing as a way to harvest more and more negative energy from the Grief Seeds. This is how it works: create magical girls- many of whom will die against witches and become witches themselves while some will collect Grief Seeds for him, collect more Grief Seeds and have more magical girls die, and repeating over and over again. In so, it'd work somewhat similarly to a Ponzi scheme, something that Kyuubey makes already very clear in his recruitment tactics. He's tried to recruit two people who are already friends (Madoka and Sayaka) so that one of them could try to lure the other into joining by one of them joining, which we've already seen. In episode 5, Kyuubey constantly tries to convince Madoka by saying that she should in order to protect her friend; and before that, we've seen Sayaka herself trying to convince Madoka to consider it. Whole process consists of attracting the girls into joining, and then continuing the cycle.

The other theory that I've come up with a while back is much more plain, but is similarly founded on the concept of the Ponzi scheme. It's said that if enough negative energy gets taken into the Grief Seed, the witch will revive. May be possible that either Kyuubey recycles witches who have been downed by other magical girls that the magical girls in another area haven't seen, or can create entirely new ones out of the negative energy; and he prevents their goal of destroying all of the witches by bringing witches back. Very flawed thought because it doesn't take Kyuubey's character into account much, but an interesting one.

And Spidey, you are (and/or hang out around) people who are way too good at speculation. No idea how you can have so many ideas about why what's what.

For the people who are interested, this site has a lot of information, theories, and speculation regarding Madoka Magica.
http://wiki.puella-magi.net/

There's your answer. This is part of where Spidey comes up with all of those theories. The other part is visiting the Madoka threads on /a/. Some of the discussions of Madoka on /a/ have actually been very good, and brought some interesting theories to the table. If it wasn't for /a/, we wouldn't have been able to crack the "code" behind the runes and read them. Speaking of those blasted runes, the scary part is that I can read those blasted things without looking at anything for reference after translating all sorts of images on /a/ threads or within the episodes.

Gonna watch Madoka 7 later, and I'll comment about Madoka and its relation to Steppenwolf later.