Why should one be nice to bad people as well?

I once boarded a crowded bus. The conductor was having a really bad day. I gave him a 100 rupee note for a 7 Rs ticket because I did not have change. He lost his cool and gave me a rude and nasty comment. I just looked at him, smiled and told him I was sorry that I did not carry change. After half an hour, when I was getting down at my destination, he apologized.
People are not bad by nature. People are not bad always. Certain situations make them act in a way that is not pleasant. If you are nice to such people, it gives them some time to introspect and reflect on their actions. More often than not, people realize their mistake and correct themselves.