I'm not sure that would be his reasonaing behind it, but it would suit his personality
Yes, but in so doing it would keep them to a minimum, would it not? Seeing as the fertility of the nobles is limited and as such they will have less kids and there will be few Allomancers. Something often noted in the books. And then that would say that the Lord Ruler wasn't giving due consideration to his own prophecies ("The Hero of the Ages will lead an army of Allomancers"), of course one can argue that he believed that he had already killed the Hero, but that would be counteracted by his consideration of Ruins possible escape and the genocide of the Resolution in the kandra.