Brutal honesty works with computers, but it's not always the best policy for keeping humans productive. Linus gets away with it because he's a celebrity, and moreover the right kind of celebrity. These comments would look very different if the public mockery was coming from, say, Steve Jobs.
The team itself might be a self-selecting group of people who can work with Linus. But, overall, I'd say that his brutal honesty works "well enough". It might not be a good way to run a corporate project, but for an OS kernel, the benevolent dictator model seems to work pretty well.
I wonder how the kernel groups at Apple and Microsoft work though... or how FreeBSD is organized... that'd be an interesting comparison.
I'd put the core linux system into a situation special enough to make it the correct decision to toss everyone but the best of the best of the linus-compatible developers out. It's not a pretty decision, but after a certain point of importance, I can understand that decision.
It's clear that that the kernel dev guys and Kay have a history. I wonder if Kay would have been more open to accepting change requests to systemd without Linus's bad behaviour. It bears thinking about...
What you have to understand is that these people are not on Linus' payroll, so he has little direct power over them. Screaming at people is one of only two forms of power that Linux can exert, the other being withholding merging of code, which is even more extreme. And these incidents actually come up rather seldom when you think about how much code is submitted to the Linux kernel, which I think is a testament to how well Linus' management is working.
Why is Linus' behavior in response to crap like this bad?
> Kay: "Again, move discussions to the mailing list; this is a bug tracker, but there is no bug to track or fix here."
Again, I have the greatest respect for Linus's achievements, but I personally feel that he uses the power those achievements have bought him to be a bully, and that gets no respect from me.