It's not funny when the victim isn't in on the joke and is distressed by it.
(Sure, the victim was (probably) a highly unsympathetic and stupid person. What justification is that? It's schoolyard-bully sociology to attack unsympathetic weirdos. Most bullies grow out of it and live with regrets. But 'spez is a fucking adult! What's he doing lurking in the worst subreddits of (his own) website, searching for prey to gaslight? What's the character of a grown-ass man who does that?)
No, whether the user is sympathetic or not isn't important, and I don't think there's anything noble about punishing users you don't like. It's just a misconception about what's important in internet forums. If you're a random free account you sometimes get nobly sacrificed (via admin abuse) for the entertainment of the masses and thus benefit society as a whole.
Basically, it's PvP. This is pretty obvious from the design; you post and people reply to you, which they mostly use to argue with you. An example of a product designed for people to be nice to each other is Discourse, which isn't much like HN or reddit.
People do have human rights, which is why I said what matters is if it's illegal or not. Putting slanderous posts under their name would be a real issue - if you think this happened go ahead and sue him - but the most common one would be doxxing: posting your IP and personal info from the admin console. Which he's probably got access to.
If you base your social conduct entirely on what's legal and illegal, you'll become a pariah very fast.
Spez is the perfect example of this. His editing of the comments cemented his reputation as corrupt and stupid, and from then on everything he communicated towards the community received a much stronger backlash than it otherwise would have, regardless of how unpopular the decision actually was.
This is confusing "the community" with "overly engaged parts of the community".
Normal reddit users don't know any inside baseball facts about the site. The normal users are those people who post the same basic "women, what's the sexiest sex you ever sexed?" questions on askreddit once a week.
Of course, their site design makes this a problem since it relies on mods, who are specifically that kind of person since they do it for free.
(Sure, the victim was (probably) a highly unsympathetic and stupid person. What justification is that? It's schoolyard-bully sociology to attack unsympathetic weirdos. Most bullies grow out of it and live with regrets. But 'spez is a fucking adult! What's he doing lurking in the worst subreddits of (his own) website, searching for prey to gaslight? What's the character of a grown-ass man who does that?)