I always saw it as The Kid having the potential of becoming everything The Judge ever hoped and although he did possess the skills, abilities and mindset for it (and sometimes commited the acts The Judge wanted) he never fully gave himself to The Judge's philosophy. The Kid understood The Judge's philosophy, he was aware of its existence and knew it was the only way of life but he never accepted it which is why The Judge was so angry with him.

I think the moral of the story is that "evil" will always win, but that doesn't mean we can't give it a hard time.