I think this is a clever way to approach an arch villain. It is good to first of all give your arch villain some clear limitations and weaknesses.
Thanks.
He has rules he needs to abide. In the case of Saith, he is stuck in his location. In the case of Hydra (the arch villain my current campaign), he is stuck in another dimension, and can only send out his minions to do his bidding. Of course the goal of the minions is to set Hydra free, so there's always a looming threat that the big bad will be released.
But another thing this does, is to put the big bad out of reach of the players, until they are actually meant to fight him. He won't accidentally be killed by the players by a lucky roll of the dice; thus forcing the DM to end his campaign early, or be forced to facilitate some way for the big bad to escape. And you definitely don't want to put yourself in the latter position.
This supports my number one rule about villains: Never put a villain on the stage, unless you're prepare to have him die. If you present an enemy to the players, they WILL attempt to kill it. So unless you're prepare to let him die right then and there, don't put him on the stage.
I'll chuck an exception on this: unless the villain is at the time so far superior in power that virtually any attempt by the PCs to fight it will end in a very quick or even one-shot TPK...and this is made obvious to all quite early in proceedings.
This allows you to introduce a villain very early in the campaign but still keep it in reserve for later when it matters.
Another thing I did for my villain, is to make him vulnerable to the power of faith. Whenever you have an arch villain who is basically an invincible god-like being, it becomes important (in my opinion) to establish some rules regarding how gods and faith work. Any evil god-like being is also going to have to deal with the good deities that also exist in the same world. This makes a priest something more than just another class that tosses around spells and hits things with his weapon. He is a character that can invoke various gods, and ward areas against the influence of said evil god-like entity. That makes playing a priest in such a setting far more special and rewarding. You can do incredibly powerful things that no other class can.
Well, my crew kinda know they've got all that coming at some point.
Saith was a side villain. His story has been woven through the campaign all along but finishing him off by no means ends the campaign - instead it kinda just swats aside a distraction.
The real villains (that the PCs/players know about) are the mind flayers, who have somehow over the long term managed to (directly in a few cases, indirectly in very very many) corrupt a large amount of elven society, to the point that elves are now seen as "the enemy" by all sorts of people-races-monsters-etc. as they slowly - and in some cases not so slowly - expand their territory. The mind flayers are backed by something, and it's already known they (or their backers) have quite some time ago quietly imprisoned one of the elvish gods* and in effect replaced him with an imposter.
* - never mind the imprisoned god was the only lawful deity the elves have...
So yeah, this thing still has legs.
And best of all, I can have the party meet all kinds of mind flayers and corrupt elves and so forth and still not have to worry about "the BBEG" going down, as (maybe) there is no single identifyable BBEG at all.
Lan-"what's fun - and grist for endless adventuring - is how the advancing elves are slowly driving the ordinary everyday monsters ahead of them into civilized lands as an unrecruited vanguard"-efan