Paranoia, amped and wired

Wandering through Barkly Square the other day, I witnessed the following incident. As it is Christmas, there were some girls dressed as elves handing out advertising flyers. As with most flyers, people who were given the piece of advertising material with the carefully thought out wording and picture placement took great care of it by carefully folding it and dropping the pamphlet in the nearest bin.
Sitting on a bench was a man in his late fifties probably of mediteranian background observing all these people thanking the elves for the pamphlet, walking a few metres and then disposing of it. One particular guy who was handed the flyer was of anglo-saxon background, aged in his mid to late 20's and dressed smartly in a white wife-beater and tan stubby shorts. His arms had that layer of puppy fat that should have disappeared when he was 20 and his legs had obviously decided to join in on the puppy fat action. His facial expression matched that of a Collingwood supporter who couldn't understand why Eddie McGuire hadn't been awarded the "Nobble Prize for Football". Let's call him Kevin Oz.
As Kevin repeated the actions of everyone else who had passed by this particular bin, the old man had a chuckle, obviously thinking about the ridiculous nature of the pamphlet situation. Kevin turns around and starts accusing the man of "having a go of me". The old man says no, yet Kevin still persists "Are you having a go of me?" and does this in a threatening nature. I decided to intervene and went up to Kevin to explain that the man was laughing at the situation, not at him. All that Kevin could say was, "I fought he was havin' a go at me." and he repeated this quite a few times. He had no comprehension that the incident could be viewed in any other way then in the way he saw it.
Is this another sign of the level of paranoia amoungst "little Johnny's battlers"? Kevin just could not comprehend the situation and he must be under the impression that everyone is looking at him and only him. Is he so insecure and frightened about the people around (especially in Barkly Square which is visited by a diverse range of people) that he must be "alert and alarmed"? What can be done to change this attitude? It saddens me to think that there are many who behave this way.
One final thought: Kevin made no attempt to apologise to the old man for accusing him without foundation. Another indication of what sort of culture is being developed in this country.