With anything in life, you take the good with the bad. Some teachers are good, some are bad. This guys sounds like he has absolutely no business teaching kids. I don't buy the whole thing that he should be excused because lots of kids like him either. What about the kids who's self-esteem he destroys? I guarantee if this child feels this way, there are probably ten others that feel exactly the same way and don't speak up (probably more, but if he is a popular teacher, they are not going to speak out, especially if they are afraid of him). Honestly, this doesn't sound like he was joking either at least not with this student. He did, in fact, take 20% of her grade away, right?
I am a student. 90% of my teachers I would classify as very good to excellent. 5% I would say are truly exceptional, amazing teachers, the best of the best. The other 5% are miserable ego-maniacs on a power trip that should be forced into the unemployment line. Again, just my opinion. I always seem to like the teachers/professors the most that are engaging, interesting, require challenging work, are fair, and use multiple different formats to teach. Really, I absolutely adore most of them and have made some life-long friends in some of them. There are a very small percentage though that can be downright sadistic, almost as if they entered the profession just to be in control and exert dominance over a subordinate. It has been studied many times over and confirmed that when people are in a position of power, a small percentage of them will abuse that power and become sadistic. It is a fact. It sounds like this teacher may be having this problem.