I thought the part with the flaming cat was funny, not because of the flaming cat (horrifying) but because hey, Lenz totally had that coming. It was satisfying to see him have to run for it.
I think Lenz's experiences are another (particularly twisted) illustration of one of the facts that all these characters keep running into - that no matter how you try to sublimate those feelings of rage and powerlessness, etc., no strategy of relief will ever be enough. Drugs, violence, achievement, fame - once we start down these roads our desires will just keep escalating. The only way to stop the cycle is to stop the behavior and experience the feelings we've been trying to chase away.
Fiction exists so we can learn to experience life as we never would otherwise, through the eyes of another person. Do I really want to experience what Lenz sees and hears and feels as he tortures and kills, down to every last detail?
I'd argue that this isn't why fiction exists. I couldn't pose an alternative, because fiction (stories) have been around as long as human language has. I think for a while one of the roles of fiction was to let the reader experience things they never would have experienced, and life through the eyes of another person. But fiction's always served other purposes too, and especially now that we have tv and the internet and all that a lot of art exists to allow us to see ourselves.
So, even though most of us probably don't relate to the mind of a psychopathic animal torturer, Lenz is modeling an extreme version of pretty common human mental processes. I think these functions are manifested in so many different ways by so many different characters in this book to stress the inherent connections between our experiences. To make us feel a little less alone and to make us empathize a little more often.