There are no 'bad people', only people with stronger delusions.
Everyone has Buddha-nature, and additionally everyone (except the awakened) has ignorance.
What you are calling 'bad people' are people who you've seen habitually act under the influence of delusions like anger, grasping, jealousy, wrath, etc.
If you believe in beginningless time, those same people have acted benevolently countless times in the past, as well as harmfully countless times.
So much for 'bad people', now how should Buddhists react to death? Death comes to us all and the only thing that persists after death is the karma. If someone has acted under strong delusions in this life, then they have karma that will carry them into an unpleasant rebirth. For a Buddhist, it's always bad when beings suffer; there's no such thing as "good! they deserved it!". So it's regrettable for someone to die with a lifetime of bad karma to carry them into a hellish rebirth.
If you think "they deserved it!" just think about how suffering feels bad. Like when you have a toothache, that feels bad. Why do you want inherently bad mental states to exist anywhere? An ignorant person will say, "Because this person is 'bad' and bad people should get suffering!" but that shows that you are reasoning from the (deluded) view of separate individual existences. Ideally nobody should get suffering. The delight in the suffering of others is itself a nasty delusion that will create bad karma for you.