I think people look way too far into the mindset of a bully. It's always "he's compensating for this," or "he feels insecure about that." If you are talking about adult bullies, it's one thing, but if you're talking about kids, kids are fucking stupid, and find humor in stupid shit, and don't think about consequences, so dumb bigger kids fuck with smaller kids because they think it's funny, and they aren't smart enough to realize the long term effects of it, because they are kids, and kids are fucking stupid.