How is the creature's newfound literacy and knowledge both good and bad?
The creature's newfound knowledge only leads him to more questions and despair. He expected the world to make sense, but he found himself asking questions like, "Was man, indeed, at once so powerful, so virtuous and magnificent, yet so vicious and base?" As he contemplates these questions and observes the people around him, he vacillates between wonder and loathing.
He learns that it it's virtue that makes a man admirable in society, but accident of birth and wealth--which clashes with his sense that goodness should count more than material things.
The more knowledge he has, the more self-aware he is, too. He understands that he is hideous to humans, so he remains, for a long time, "unseen and unknown." He admires virtue and breeding and compassion, but he is not able to make friends or even show himself. He is, if anything, lonelier and more miserable for his knowledge.