I agree that things done for an many reasons including ineptness, nonscientific views, fear, reactionary politics, poor training, or even doing things from a detached perspective can seem cruel, but the cruelty is not the point. The cruelty is a byproduct, not the goal. It's a bad and oversimplified phrase and in nearly every serves to obfuscates issues.
For example, knocking down a big tree can seem cruel if you're a squirrel and live there. But if you're a human, maybe you know that that tree was damaged in a storm and is about to fall over and destroy a few homes and potentially kill someone.
A serial killer torturing a victim? Maybe the power is the goal. Maybe the rush is the goal. The cruelty? It's a means to an end. Understanding goals is how we stop people. Hand-waving away true reasons behind things doesn't help us understand and therefore stop them.
You can handily cherry-pick examples throughout history of people being outwardly psychotic, and I'd agree with you. However, when used in modern-day political contexts, most of the time it's used in reference to the things I mentioned. Ineptness, fear, nonscientific views, etc.