Yes genocide is wrong, but if the confines of this story, maybe not so much.
They seek to consume humans, they have no intention of living peacefully with them. Mujika had good intentions for the kids and displayed genuine concern, but Sonju definitely has ulterior motives and wants to return to an earlier era where he can freely hunt humans. Mujika is an outlier, she's the exception, not the rule. I don't share your ideology and think it's largely flawed. Everything the demons have done thus far is for the development of their species and making human consumption more beneficial for themselves. They experiment on children, mass produce and force feed them, cultivate their intelligence to further their own, and the aristocracy hunts humans for sport to feel the sensation of death or to feel powerful. And yet, I'm supposed to feel compassion for them?
If someone wanted to kill me and/or my family/friends, whether it be for survival or pleasure, I'm going to act in my best interest and wipe them out instead of attempting to reason with them. My life has no value to a demon aside from sustenance, why am I seeking to appeal to their "humanity" when history and personal experience have shown me that it's futile? I'm not arguing to kill all demons, only those who don't wish to co-exist. Demons who are willing to eat corpses or synthetic flesh are okay, but all others who see humans as prey, we're going to actively go after them. It's survival of the fittest.
This premise is reminiscent of The Matrix; Machines use humans as batteries, and hold no value for human lives beyond utilitarian purposes. They seek to kill the freed humans. Is Neo/the survivors of Zion wrong in seeking to destroy the machines to ensure their own survival and to free those enslaved by the Matrix?
Is the CCG in Tokyo Ghoul wrong for hunting ghouls that feed on living humans?