After reading this, I can only say one thing: you're living in fantasyland. This is the real world, not some libertarian utopia. And regarding your last point, what about pedophiles? Rapists? Should we just surround them with love and forgiveness?
We also should -have- provided them with love and forgiveness so that they would feel comfortable talking about their problems before they could result in severe issues.
What do -you- suggest we do? Beat them up? "Teach them a lesson?" What will that accomplish, exactly?
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Let me just say that I sense a great deal of pain in you. This is not an attack. Your points seem to be based in fear and anger - you are being very reactive rather than clearly laying out a well-reasoned argument. E.g. contrast your response to my own - yours relies on ad hominem and caricature and then finally a straw man argument. You seem sad. I hope you're OK. Hope!
If there were no examples of sadists who could not be rehabilitated, your point would be obviously true. Unfortunately, there are many examples of sadists who resist rehabilitation. These people exist now, whether or not they could have been rehabilitated earlier by love and forgiveness. Even if you were strictly correct, you'd still have a bootstrapping problem, in the form of what to do with these people today.
I contend that there will always be people who become sadistic outside the reach of whatever institutions you attempt to create to shower love and forgiveness on them, and I further contend that many people who, once they become sadistic, cannot return to a state of empathy. For the first point, I only have to point to hunger. Food and shelter are obviously tractable problems, yet we continue to have a problem with hunger and homelessness. To think we can eradicate more complex social problems than those is really quite naive.
As to the second point I am open to scientific evidence to the contrary, but please bear in mind that from society's standpoint, a recidivism rate greater than zero may still be less preferable than lifelong incarceration for sadistic criminals. Most people would agree that once you've taken a few lives for the fun of it, it's not worth the risk to another member of society to "find out" whether you've been successfully rehabilitated.
Still, this child has no repeat history that we know of, and probably wasn't reprimanded for his behaviour before. It is likely that he could be a psychopath with everything he said, but it is also likely that the veil of anonymity made him less sympathetic to the human plight of his victim, just as we all take what we see on the internet with a grain of salt.
EDIT: Ok, maybe not really a child, but in the eyes of the law you might as well consider a minor a child. However, I sure know few hackers who exploit their status as a minor as best they can to avoid legal consequences.