[StrongInTheArm]

... It seems that people are labeling others "insane" simply for taking pleasure in something that they could never take pleasure in. Am I wrong?

You are probably right so let us try not to do that

We seem to be dancing around the term 'insane' at present. It seems to have different meanings in general usage, in the legal profession and in the medical profession. http://en.wikipedia.org/wiki/Insane

Insanity, craziness or madness is a spectrum of behaviors characterized by certain abnormal mental or behavioral patterns. Insanity may manifest as violations of societal norms, including becoming a danger to themselves and others, though not all such acts are considered insanity. ...

From a legal perspective, in the USA at least:

The states differ somewhat in their definition of insanity but most follow the guidelines of the Model Penal Code. All jurisdictions require a sanity evaluation to address the question first of whether or not the defendant has a mental illness. Most courts accept a major mental illness such as psychosis but will not accept the diagnosis of a personality disorder for the purposes of an insanity defense. The second question is whether the mental illness interfered with the defendant's ability to distinguish right from wrong. That is, did the defendant know that the alleged behavior was against the law at the time the offense was committed. Additionally, some jurisdictions add the question of whether or not the defendant was in control of their behavior at the time of the offense. For example, if the defendant was compelled by some aspect of their mental illness to commit the illegal act, the defendant could be evaluated as not in control of their behavior at the time of the offense.

Psychosis: http://en.wikipedia.org/wiki/Psychosis

Psychosis (from the Greek ψυχή "psuche", for mind or soul, and -ωσις "-osis", for abnormal condition), with adjective psychotic, literally means abnormal condition of the mind, and is a generic psychiatric term for a mental state often described as involving a "loss of contact with reality". People suffering from psychosis are said to be psychotic.
People experiencing psychosis may report hallucinations or delusional beliefs, and may exhibit personality changes and disorganized thinking. This may be accompanied by unusual or bizarre behavior, as well as difficulty with social interaction and impairment in carrying out the activities of daily living.

I suspect a sizeable proportion of the prison population should be treated for mental illness. From your experience would you agree?

That burglar you spoke of gives me pause for thought. As for the criminal at the heart of this thread, I would question if he knew right from wrong and whether he was in control of his behaviour given it's unusual and bizarre nature.