It isn't "bad" to feel happiness at the misfortune of others. But it depends on how you define "bad". If you mean morally wrong, then, yes, it is bad. And it also depends on the severity of the misfortune. If someone fell down a flight of stairs in a Three Stooges kind of way, I'd laugh. But if a man lost everything, including loved ones and material possessions, I'd feel indifferent (although the average person would feel bad).
So I don't see what the fuss is all about. Besides, happiness is a personal attribute. You can't give someone happiness. You can do things that will make them happy. If they're happy to see you, then your mere existence is enough to satisfy them.
So why should it matter to others whether someone is experiencing schadenfreude? It's not harming anyone.
EDIT: Take a look at my signature. I find it hilarious (especially when the tail flops down), and yet, the guy could have had a concussion. In this case, I'm laughing at the stupidity of the situation.
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