I have known a few of these folks in my time. Unfortunately there are a significant number of unqualified and/or emotionally immature people who rise up through the ranks of just about every organization.
The fact that these jerks exist is not the shocking part. What often shocks us is that they are allowed to continue to spread misery in their companies for so long. In my opinion this is all about accountability. The leadership of the organization should hold Mr. Jerk Manager accountable for the way he behaves. Many leaders do not feel comfortable having these types of conversations with the managers who report to them or they are concerned that they will lose a productive manager (often with a specific skill set) if they tell him he’s a jerk.
In the end, Lisa is right, you must vote with your feet and leave a manager that makes you feel bad or treats you disrespectfully. Life to too short to work for a jerk.