He is the only non-human primate we see in the book series, which is a very interesting fact. Non-human primates always freak me out

I think it's the way that he works just enough truth into his lies so that they are accepted, and the fact that the Narnians are helpless to do anything but trust him.

Good question though. . . because apart from his lying, he really doesn't do anything villainous, but he's still considered a majour villain.

I think the decision to make Shift an ape is very deliberate. As a talking beast, he most resembles a Human and his evilness echoes a certain cold and utter ruthlessness we see in each other. While he doesn't actually do a lot of villainous things, as DiGoRyKiRkE said, it is that icy, self-centric, ruthlessness that freaks me out. The willingness to cause someone the most amount of suffering in order to achieve even the smallest pleasure or convenience for himself disturbs me. There has been too many real life people like that. He reminds me of Rasputin (a man famous for being unsettling).

Shift is a kind of catalyst. Very soon his control of events is taken from him by Ginger and Rishda Tarkaan, and he ceases to enjoy himself, but he doesn't have the courage to do anything about it.

When Shift claims to be human he reminds me of something the that the Beavers said in LWW:
"No, no, there isn't a drop of real human blood in the Witch."
"That's why she's bad all through, Mr Beaver," said Mrs Beaver."
"…….But in general, take my advice, when you meet anything that's going to be human and isn't yet, or used to be human once and isn't now, or ought to be human and isn't, you keep your eyes on it and feel for your hatchet."

I'd add to that "and says they're human and aren't"

There has been too many real life people like that. He reminds me of Rasputin (a man famous for being unsettling).

Also, Shift is one of the most manipulative of the characters of the Narnia series, especially with poor Puzzle. Human or not, he is right up there with LOTGK, maybe Wormtongue, in LOTR, and maybe on a level with Uncle Andrew and Ahoshta Tarkaan.

Shift's crimes are to mimic Aslan, using the unfortunate Puzzle, for material benefit and personal gain, to be in cahoots with Rishda, then Ginger to blackmail, dominate and enslave the other animals, and to sell them out to a hostile foreign power, ie Calormen. I wouldn't say he didn't do much, otherwise Jadis would have had no claim on Edmund's life. Such antics in the real world could have people executed.

Shift's trouble is that he might envy humans, want to be like humans and to be regarded as such. Certainly he is as treacherous as any human. But, try as he might, he just doesn't cut the mustard. No wonder he is creepy.

http://en.wikipedia.org/wiki/Uncanny_valley

The fact that Shift is a crafty ape--a not-quite-human creature in human finery--sets him up as the anti-man. He involves himself in layers upon layers of deception, possibly deceiving even himself. He is no longer fulfilling the positive ideal of the ape, the creature he was intended to be; he is now a mere mask, a shadow pretending to be something real. He is insubstantial at his core, a parasite on illusions. In Tash he finally meets the reality with which he toyed.

Interestingly, it wasn't because Shift was an Ape that he always creeped me out. (But now that that point has been made, I see it, and Lewis's ingenuity in using an Ape now amazes me.) It was along the lines of how swiftly and easily he manipulated the Narnians toward him. Not knowing what else to do -- since Shift never allowed them to communicate with the fake Aslan -- the Narnians fell straight into his trap. His plan had detail--lots of it.

There's also one other thing that I think sets Shift on a different scale from the other villains of Narnia. It's true, the White Witch, Miraz, and the Emerald Witch all committed terrible acts. But readers are accustomed to evil witches, no matter what the witch does. Readers are also very accustomed to Miraz-type characters who kill the heir to the throne and take it for themselves. The character of Shift, on the other hand, takes an entirely different tack. He's a Narnian, for goodness sake -- up to this point, Narnians have almost always been good. Then Shift blows this illusion to pieces! We can no longer assume that Narnians will be good. They have the capability of turning evil (evil to the point of not being redeemed by Aslan).

A great portion of The Last Battle lacks the magic and hope that dominates the other Chronicles. Shift is only one part of a very dark story. If the story lacked Shift -- or if Shift was in a different storyline -- then there would not be nearly the same sense of doom and horror.

I think Lewis really had something to say about the line between being a human and being something else. Shift's character, in being human-like yet not quite human, sort of refers back to what Mr. Beaver said in the first book: "But in general, take my advice, when you meet anything that's going to be human and isn't yet, or used to be human once and isn't now, or ought to be human and isn't, you keep your eyes on it and feel for your hatchet."

The question is, why did he put forth this view? Was he trying to say something about false prophets? (Since in the context of Narnia, humans did indeed fulfill a prophecy at one point, and anything human-like could potentially be a source of deception?) Was it just a caveat about not being deceived by people in general? Or was he really trying to say something specifically about humanity being sacred?

A valid point has been raised about Mr. Beaver's comments, but I think that we need to also look at the other creatures of Narnia before we choose to look at this situation through that lens.

After all, Fauns and Centaurs are "part human" as well (by their very definition).

I'm not sure how this ties into things, but I thought I'd raise the point, as these characters are always viewed with a positive connotation. Fauns and Centaurs are always trustworthy throughout the series (unless you count early Tumnus, or perhaps some unnamed fauns and Centaurs that may have switched over to the Calormene ranks in LB).

As goaty and horsy as Fauns and Centaurs can also be, they don't try to ape human "civilization" which is what Shift does. Yes fauns and centaurs do have human characteristics, in fact all those chosen Narnian creatures have at least that one human characteristic that they can communicate intelligently using the speech of men.

Fauns and Centaurs do what they can do best, whether it is part of their goaty, horsy or human natures. Fauns enjoy music and dance though they fight in wars if necessary. Centaurs are wise seers and stargazers, though one of the funniest bits in the Narnia series is that Silver Chair faun's description to Eustace and Jill of what a Centaur might eat for breakfast, having two stomachs. But Shift not only apes humans, he apes what is worst about humans, intending to pass himself off as human. Shift can be quite skilful, such as in sewing, but he can be manipulative so that whatever happens, it is according to his point of view.

He also denies the difference between good and evil, betrays his fellow Narnians to the Calormenes, wears clothes, greedily taxes his fellow creatures, gluttonously eats the nuts squirrels store for their own families, and eventually he becomes alcoholic. Far from becoming equal to humans, the Calormene captain, Rishda Tarkaan, treats him with contempt.