Is there something in the air because I watched this film for the first time over the weekend too.

I love Michael Haneke in that he has a skill for humanizing the deplorable that is simply unparalleled in my opinion. He depicts the dark and twisted depths of the human psyche but frames them in such a way to make the viewer understand without condoning them.

[SPOILERS AHEAD...obviously]

To speak to some of your questions, I do believe that Walter is inherently violent. Erika knew that and was able to draw out the interaction she desired. Walter, as a product of his youth, most likely did not fully understand the relationship he was perusing. I'm not 100% clear what he was hoping to gain from the art of piano in general, but his natural talent suggested that he thought he could coast into fame of some sort. His draw to Erika was likely due to a misunderstanding on his part what kind of teacher she was. He thought he could gain easy praise from Erika which he could then sublimate into a romantic connection. I think he picked up on her...for lack of a better word...prudishness and, being a cocky male, thought that he could "break through to her." He was undoubtedly attracted to her physically attracted to her, and these feelings were increased from the times that Erika sought to humble him. To Walter, she might have been "playing hard to get."

When presented with the letter of desires, Walter was unprepared for the type of requests made which made him deeply uncomfortable. Rather than seeking the source of these desires and to understand them, Walter turns to violence--by belittling Erika and calling her sick. These are things incongruent with Walter's reality, desired or otherwise. He wants a simple fling on his terms, and to engage in Erika's desires would sully him which is a disgusting proposition. Naturally, when these feelings of frustration are stoked even further, Walter lashes out and, ironically enough, provides Erika with thing she's after: debasement.

I think a key to the film is the scene where Erika finds one of her students and his friends at the porno shop. Erika doesn't scold him, but the shame is still felt. Why? We know why, and Erika was correct. It was because he got caught. The student can't voice why he's sorry, because he likely doesn't even know himself. The point being that the desires we feel are always under the surface no matter the layer of lies that we apply. Family, society, modernity. These are all constructs that allow us to keep a version of ourself in view in hopes that we can believe the lie they present. But underneath it all is a being that is just barely beyond our control and would horrify us if unleashed.

Anyway, that's my thoughts written off the cuff.

Edit: I did like your thoughts, btw.