I've always wondered why labeling something as "idiotic" or "very very bad" makes people happy. In rational thinking, labeling is considered fundamentally flawed because it simply shows how the labeler positions an object/event on his/her internal value map without explaining the reasoning why s/he does so. As John R. Searle would say, something is good or bad in virtue of something else, not because its intrinsic goodness or badness.
Yesterday, I found a review paper* that describes multiple psychological experiments on Schadenfreude. For example,
In the context of a real-world sports rivalry, Red Sox and Yankees fans report feeling pleasure, and show activity in reward- related brain regions (i.e., right ventral striatum including nucleus accumbens) when they watch their rival fail to score against their favored baseball team, and also against a less competitive team in the same league (i.e., the Orioles). Attaching positive value to outgroup members' suffering may provide motivation for inflicting suffering: People who show more reward-related activity when watching the rival team fail also report being more likely to actively harm the rival team’s fans (Cikara, Botvinick, & Fiske, in press). These findings extend to situations in which the rival fans themselves are in physical pain: Soccer fans exhibited reward-related activity (again, the right ventral striatum) when watching a rival team’s fan receive a painful electric shock; the magnitude of this activity predicted participants’ later unwillingness to relieve the rival’s pain by receiving half of the electric shock themselves (Hein, Silani, Preuschoff, Batson, & Singer, 2010).
It looks like, labeling facilitates Schadenfreude-based pleasure. In other words, a social activity that looks irrational from a purely logical perspective, has significant psychological advantages because it creates positive in-group empathy.
* Cikara, M., E. G. Bruneau, and R. R. Saxe. “Us and Them: Intergroup Failures of Empathy.” Current Directions in Psychological Science 20.3 (2011): 149–153. Web. 13 Apr. 2012.