Thanks for the response, Doc. You bring up a lot of good points! I think there is some clarifying in my motives and the background story leading up to my original post. I appreciate your saying that my action was fair, but I aim to show that it was also necessary.
I want to clarify that I was not trying to enforce any kind of moral code or punish out of annoyance. The hammer came down because that guy was treating our gaming sessions as his personal venting sandbox where he would crap on all NPC's he encountered and expect to get away with it. When I had him beaten and ransomed, other players told me I did the right thing because he had been goading the GM for at least 3 sessions. Believe me, choking an 8 year old kid in the middle of a market, then squatting in a shaman's home was the tip of the iceberg. Also, I know the point you were getting at with the "helper kid", but I don't think there would be an air of indifference in a crowded African market where a foreigner (a white foreigner) is choking a local child in the open, no matter what the kid is suspected of. Plus, all that the locals tried to do there was say "hey, you should knock that off," (and someone recorded the thing) and the headbutts started flying. Again, that was only a small part of the goading.
I understand that in Shadowrun, PC's generally pursue selfish ends with horrible horrible means. This is what it is to be a bad guy, it makes for good roleplaying and a jolly good time, and it's integral with the whole cyberpunk setting. I don't disagree with you there. I think there is some confusion, however, between how a GM should treat a morally bankrupt character, and how a GM should treat a belligerent sociopath. Behavior such as, (metaphorically) pissing on almost all NPC's, starting fights and killing people in public places, choking children, etc. would cause serious problems in the real world, so I believe that NPC's retaliating to "check" the PCs when they start acting as though they are invincible and above consequences is not only reasonable, but necessary. Not doing so enables such actions from the PC, and makes for an unrealistic and obnoxious gaming session. Also, it leads to more goading later.
I guess the main point is that I'm seeing a big difference between a player playing a belligerent jackass, and a player playing an evil man. Calling down the thunder for the pure jackassery is not the same thing as calling down the thunder because a player is behaving immorally, and I was doing the former and not the latter. I believe the jackassery calls the thunder upon itself, and saying that the GM would be wrong in making NPCs retaliate appropriately effectively takes the GM out of the game. (I'm not saying that you said any such thing, I'm just trying to justify my actions) Similarly (as you were saying), a GM reaching out to enforce his/her idea of the good takes the players out of the story by railroading them too harshly. I don't think you were saying otherwise, I just think it was a miscommunication about what I did and why, which is why I wanted to clarify.
I do understand that there is a fine line to walk, though. You don't want to go overboard and outright punish your players. The bottom line is that we are all getting together to have a good time. For example, I'm not sure I'd go with the undercover KE car in the club parking lot. That seems excessive, like we're stretching realistic possibilities to punish the players. (I mean, what are the chances, right?) I think this last paragraph was at the core of the point you were trying to make, am I right?
Then again, some players treat Shadowrun like Grand Theft Auto, right down to beating grannies with a baseball bat. That kind of stuff should be dealt with appropriately, and a GM should feel no remorse at ending such sessions with a TPK.
Maybe my new signature line will be "This is not Grand Theft Auto, this is Shadowrun." Yep, it's decided.