Rewards should be balanced between the sides. Doing an activity of equivalent time, effort, and difficulty on each side should return the same rewards. To get more people playing red-side, we need to understand WHY people don't play as much on the villain side. I personally don't think it's because rewards aren't as good, but rather that the content is more satisfying blue-side. Most blue missions feel heroic, like you're doing things a real hero would do. You react to villains and take them down.
A lot of red-side content does not feel particularly villainous. A lot of it is fighting other villain groups, working for someone else to get them ahead, or reacting to things Longbow or Wyvern are doing. There are a small number of missions where you, as a villain, are the big bad of the arc and are seeing your machinations come to fruition, but most aren't. There's a lot of "do this thing for this other villain for the promise of future rewards", the payoff of which never comes because of the way the game is designed (it's usually a souvenir which does nothing mechanically or introduction to a new contact who just repeats the chain). You need only look at the difference between the Kheldian story arcs vs the Soldier of Arachnos story arcs to see the difference. As a Kheldian, you take down the Nictus and save the world. As a Soldier, you make yourself a Destined One so that you can ultimately... beat up Statesman once and maybe set the stage for taking down Arachnos (you know, the thing you're a part of) for some reason.
If the redside content isn't as fun, increasing the rewards won't really help long term. It'll just make people who want the rewards force themselves to play content which is less fun. That's not good! Instead, the content should be improved so that people want to play it as much as they play the blueside content.
Of course, it could always be that people just don't want to play villains that much and won't really like it even if the stories are well written, make you feel villainous, and give equivalent rewards. Which means that there isn't really a good solution to it.