I don't think he means to be cruel at all. It's just good TV.
I can't tell you how hard it is to find a show, with "dangerous situations", that I'm not bored with because I know the good guys will very rarely die. And if it looks like they'll die, we all still know that they'll make it. I've just gotten spoiled, growing up with Whedon shows, so I get bored by shows that don't take enough risks.
With Whedon shows, you never know, and I love that. A death could be slow and bitter-sweet, like with Fred, it could be quick and brutal, like with Anya. We don't know what Joss will do with the characters.
And because of that, I learned to appreciate the good times on the show, because you never know when something bad will happen. They're not shows were everything will be happy all the time. And that makes it feel real. Because Dollhouse, Buffy, Angel & Firefly were shows where people are put in dangerous situations, which means that they get hurt, because anything else wouldn't make sense. That's real.
If Joss made a show about a ordinary family, in a ordinary place, yet bad things kept happening all the time, it would be different. He couldn't go to the same depths over and over again, not unless there could be a reasonable explanation.
For example; Buffy and the others lived on a Hellmouth, and they fought demons. Of course they would die, and get serious emotional and in mental problems. Them living happily ever after wouldn't work. One could argue taht death and pain happened to often on the show. I mean it doesn't have to be all or nothing. I just personally think it's just enough.
So I don't think he's sadistic. I just think he's realistic. And that he also want to explore characters. I think I've read how Joss decided to keep Spike on the show after Lover's walk(Buffy, season 3), because wasn't until then that Spike became interesting to Joss. And I see his point. Like that crazy guy said in The Train Job(i think that's the episode) in Firefly, you can't trully know someone until you hurt them, or something to that effect.
To sum up; no pain, no gain.
Maybe Joss is sadistic. Depends who you compare him too(I compare him to me, and I think I have a slight above average interest in pain). But considering the love between the characters on the show, I assume he (unless that's all from other writers) is a empathic man. Which is why he knows what to write, to get us to love the characters as well.
For example, I don't think I ever loved Fred as much as when she died. Or admired her more. And now when I do re-watches, there's always a bitter sweet feeling, knowing she will die. And I'm always afraid for the characters when they get into dangerous situations. Because I don't know what will happen. And when they're happy, I'm happy for them. Because I know it won't last.
