All I know is that cruelty is always justified in the mind of the cruel. The root of that justification process is personal ego/entitlement matched with the assumption that punishing others is 'just' and the only way to resolve personal anger.
Punishment is often more about pleasure for the one with the power to punish than it is actually more about justice or improving social conditions.
In the U.S., we have, for instance, a justice system centered around punishing people for nonviolent offenses that it set up to make it hard for them to rehabilitate into society once they finish serving out their excessive sentences.
I would differ from anarchist philosophies (the ones that are actually anarchist), though, in arguing that the use of power is not always immoral. One must exercise power, for instance, to prevent a murder. That is not immoral.
Regarding the O.P, I'm not sure if the issue is so much sanity vs. insanity. Not all mental illnesses are sociopathy, so I'm not comfortable drawing the line there. I also think sane people can be convinced to commit acts I would call evil, and I think it's disturbingly easy for this to happen.
I think morality depends on having an individualized conscience, insulated from the fads and fashions of the peer group. What is important for what I consider to be "true morality" is knowledge of one's inner self, in addition to knowledge of others. Connections must be drawn so that the golden rule can be applied properly.
The thing I'm still struggling with is what to do when people want different things from me, so doing what I would want done would not work.
