It makes Michael still sympathetic, because it proves that everyone in the office is a huge baby, but he's still a jackass. Maybe before he was in management he was just a dorky guy with a lame sense of humor, but being manager as long as he's been has molded him into a complete jackass. Just because he "understands" what makes these people tick doesn't mean he isn't an a-hole. You just understand a little bit more why he is. And, yeah, they should want to murder him every day, but I think you still go to jail for that. There are times that it would be justifiable homicide, though...
Not a great hilarious episode, but a good character one. The bit with the mugs at the end was great.
And Kevin's constant, "What does a bean mean!?" was damn funny, the more insistent it got. And Michael's drawing of Toby.