Horrible actively defined himself as a villain. Sure he was a shy, quiet guy, and all that stuff, but he aspired to be a bad guy. What did he think bad guys actually do? He reminds me of an adult version of those kids who pull off school shootings, or a kid who joins a gang, and finds he's bitten off more than he can chew.
Despite being extremely arrogant, Hammer seemed okay in some respects, in fact it was Horrible who came of as being a dick when he was stalking Cpt. Hammer and Penny. I think that he genuinely came to care for Penny, who was making him less self-centred. "Everyone's a hero might have been an highly condescending song (when you're down and out, you don't want to be told to pull yourself up by your bootstraps by a man who's probably never suffered a day's adversity in his life) but Hammer, in his own meatheaded way, genuinely meant it.
Horrible could have put his brains to good use and become a superhero, but he chose the dark path without fully understanding what darkness is.
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