Bad GM's can fall into a lot of different categories. There are those who are disorganized, bad story tellers, and even those who just don't know the rules well enough to run a game. However, in my experience the Adversarial GM is the absolute worst.
Some Games (I'm looking at you HM4!) actually encourage this sort of adversarial GM role, though perhaps some are more serious than others. Yet other people seem to fall into the role with no coaxing what-so-ever from the authors of the system they run. Perhaps it is part of their personalities that comes out while they run a game.
A highly competitive person may slip easily into the role of an Adversarial GM. That person, always striving to win, will be happy when the PCs have been crushed under foot and disappointed when they vanquish his monsters. This is not as it should be. It is indeed the GMs job to challenge his players, but not to seek to destroy them.
At its heart the role of GM is not unlike the judge of a courtroom, it is imperative that he stay impartial. Though the responsibility of running the monsters and other NPCs falls to him they are not his characters, as PC belong to a player. Again, this does not mean that a GM should fail to play NPCs to the full of their potential, that is part of his job, but he should not take a special interest in their well being. Nor should he play them beyond their capabilities so as to "beat" the players.
I'm not going to get into fudging die rolls or breaking rules because people should already know that cheating is never a good idea. I don't hold with fudging die rolls for any reason, not to save a character's life, and not to take it. There is a tentative trust at a gaming table when rolling behind the shield. If you violate that trust you may find your players no longer as interested in your game. Fudging a die roll so your villain can live to fight another day is going to frustrate your players and make them feel they lack the ability to affect the world around them. As for rules, if you want to make your own custom rules that is fine, but fudging them or ignoring them all together is not. I once had a GM who allowed a minor globe of invulnerability to last for hours instead of rounds. When we told him it was a rounds per level spell he disagreed so we looked it up . When he found out I was right all he said was, "oh." When I asked if my spell went through he said, "uh, no" and continued on with his little farce. That was the last night of that game.
Even those GMs who play it by the book but seek to create a "You vs. Me" are failing. The game isn't about the Players vs. the GM, it is about the Player Characters overcoming challenges. Making it a player vs GM game can foster a lot of ill will around the gaming table leading players to think that the GM is "out to get them." RPGs are a group storytelling game. Everyone around the table is needed for it to work and if one side decided to get up and leave the game would be over just like that.
In the end the Adversarial GM loses site of one of the major tenets of GMing, being impartial. Yes you have to control the enemies and make sure they act as well as they are capable, but it isn't your job to alter rules on the fly or fudge die rolls to ensure their victory. Let's face it, if it was a competition the GM would always win. All one would have to do is send waves upon waves of monsters at the PCs until they were all dead. But if you attack the PCs with 25 Red Dragons and burn them to cinders you don't "win." The game has become a joke and everyone loses.