The fundamental flaw of all child psychology pertaining to bullies is that it works under the premise that bullies are working under a coherent logic that can be reasoned with. There's no logic to bullying people; it's like you said, he just enjoys the suffering of others. This is the kind of ethical stalemate that allows serial killers and power-mad dictators to flourish in the age of reason.
When I first read your post, my knee-jerk reaction was: "Beat the **** out of him and knock some sense into the little monster!" but then chances are that's probably going to give him exactly what he wants. If trying to reason with him and talk to him just fuels his fire, imagine what coming down to his level might do.
Then again....
Some people are so introverted, so wrapped up in their own little joys, the only thing that will jar their sense of reality is a wake up call in the form of... well, back to the knee-jerk. I've been bullied enough times to know that fighting doesn't really solve anything (levels and coming down to them and such), but then again, if this guy thinks he's better than everyone else and practically lives outside reality in his own little mind-kingdom of natural immunity to the pain of others, then maybe it's time to storm the castle.
My other suggestion is to go around to all the people he belittles and picks on, and get them all to sign a petition. The aim of the petition can be for him to get suspended, transferred, expelled, or really just anything. Gather all the signatures and present them to the principal. If you're going to do then, then what you absolutely must do more than anything is: while you're presenting it to the principal, simultaneously give a copy of the petition to someone in the administration, above the principal that is. That way, if the principal doesn't act, orders from on high might pervail in the end.
Good luck, dude, and if fists do enter the equation, give him one for me.
