There are lots of reasons why the Really Olds engage in this behavior, but mostly they are the same reasons that anyone engages in that kind of behavior: anger, frustration, fear, and a resultant need to control.
They are angry and frustrated because all opportunities in life are gone forever, and they know it. They are angry with themselves for mistakes they made in their life, and frustrated that those mistakes can never be corrected. They are angry because most of their friends and loved ones are already passed on, and frustrated that they are still here, either alone or mostly alone. They are angry and frustrated because they can no longer do what they want to do. The list goes on and on.
Furthermore, once you get to a certain age, and your health is gone, there really is nothing to look forward to but severe illness and death, which could come at literally any time. The Really Olds are therefore also very afraid, understandably so, and they many times deal with that fear of the unknown by taking strict control over what little in their life they still can control. The end result of that frustration and anger, combined with fear and a resultant need to control, is bullying. This is true whether they are bullying their caretaker, or other senior citizens.
However, in all truthfulness, some of them also act out even worse than they otherwise would, because they know they'll get away with it due to their age. I cared for my grandmother until she died earlier this year, and she was hell on wheels sometimes, because really, what was I going to do about it? She knew I could never bring myself to put her in a nursing home, and she knew that no one else in the family could care for her full-time as her health required. She therefore knew that I would tolerate her bad behavior, and she was right. I just learned through hard experience to not take it personally, because her bad behavior was never about me anyway.
I have therefore seen that nasty side of the elderly up close and personal many times in my own home, but understanding what causes it does not make it any more pleasant. I am just not sure what we can do about it, though certainly if they are regularly bullying other senior citizens, there should be severe consequences such as removal from the facility. Where do we put them then? Perhaps there need to be facilities which are designed specifically to care for the more problematic seniors, when the behavior is not explained by a medical condition, so the meaner ones can only bully the other bullies.
Other than that, or forcing families to care for their own vicious elders so as to protect the other senior citizens from them, I have no idea what we can do. It's a good question though, and one which definitely needs to be explored.