I really liked this episode. I'm in the camp that empathizes with the kid, and I think that's what makes it a good horror story (as Al said). Yes, the murder is gross, but that isn't really the point, and it's thankfully not as splattery as it could have been. The most horrifying thing in the story is Tim's home life, and the scary part is that (ironically due to empathy) I can see where he's coming from. Obviously becoming a serial killer is not a reasonable answer, but given Tim's predilections, you can see how he kind of needs it. He has no other outlet for his anger, and more importantly, for his powerlessness. That homeless guy learned Tim wasn't powerless, goddamnit, and then his brother and dad learn their lessons too. I didn't see it purely as revenge, more as Tim seizing power back that had been taken from him. The fact, as mentioned above, that the story passes no moral judgments is what made this one work for me.
Anyway, I was wondering if any of you watch Fringe? This story reminded me of "One Night in October", the one with the two alternate universe versions of the serial killer/psychology professor. It's the best episode this season by far, so maybe that gives me a better impression of this story, but I'm wondering if anyone else had that mental connection?