The narrator is obviously insane. He does not understand his own motivation. He says he has no reason for wanting to kill this old man, who is probably an uncle. Yet he seems to be looking for an excuse for killing him. He says, "For his gold I had no desire." This, however, seems like the most likely motive. The narrator would apparently benefit from the old man's death by getting ownership of the house and the gold. This makes it seem likely that he is a close relative of the old man and perhaps his only heir. The eye may seem "evil" to him because he imagines that the old man can see through him and read his hidden thoughts. The narrator would not be the first young person to whom it would occur that if a certain elderly relative were to pass on, he or she would be freed from obligations to that relative and at the same time become prosperous. Regardless of his protestations about his sanity and his lack of common motivations for committing the crime, the fact is that the narrator wants to commit a murder and get away with it, just as if he were doing it for the customary motivation of greed.
I'd say the eye wasn't evil. 'It was a pale blue eye, with a film over it'. Later the eye is described as "a dull blue, with a hideous veil over it". But it somehow freaks the narrator out.
The narrator is obviously mad, even though he says he isn't. The old man has cataract, this doesn't look nice of course, so that's why it scares the narrator. There really was no need to kill the old man over this.