That is the point. And if you, as a DM, had a character arrested for dropping litter on the ground, you might want to consider later what you could have done differently.
I'm not assigning blame to the DM here; I'm saying that all of us (players and DMs) need to be able to look back at sessions that went wrong and ask ourselves, "What could I have done differently?"
Even though I don't think this DM did anything wrong and it's clear the player is being difficult, it's important to remember that the sheriff didn't just "appear." The DM put him there. Instead of minimizing a difficult situation with a difficult player, this ended up exacerbating it.
To put it in "real life" terms, if you're the manager of a store and one of your employees acts out in a small way, it's your job to deal with it. However, part of your job is to make sure that your confrontation with the employee doesn't escalate out where the customers can see it. You take him into the office later and talk it out one-on-one; ultimately you might even have to fire him.
Having blue bolts rain down from the skies or (to a much lesser degree) arresting the character for a relatively minor infraction is akin to starting a shouting match with your employee in the middle of the store. You might be in the right, but it's no good for the store, the other employees, or the customers...in my opinion...I've worked for people who clearly disagreed.
I get what you're saying- you've said it a few times now but the issue is there are X players in the room, and one DM (or whatever), if any one of them breaks the social compact (within the game) then there are repercussions. The DM gets to decide because s/he is the arbiter, the OP did that- now what?
As for putting the player's PC in jail- err... one roleplaying experience later and he's out, or whatever, this isn't the real world, exacerbating the situation- surely the DM got beat to that one. Surely for the half-orc a bit of time in the slammer is just a badge to wear with pride- walk the walk, talk the talk.
I remember, in my real life during my drunken youth, being arrested for climbing on to a roof and walking up and down on it (singing at approx. 2 AM)- I don't remember the quiet chat, I remember a cold cell. An exciting roleplaying encounter (that reduced me to tears again and again- although I learnt several new swear words) and then a trip home in a police car the next day, the nice man wouldn't put the light and/or the siren on however.
The quiet chat is good, if the roof smashing player has a reason for his roof chopping that it will come out in the wash, in the meantime the player goes directly to jail, a line has been drawn. All players are aware that the line exists- the game proceeds...
Your real life analogy is good but what does chopping a hole in the roof equate to in one of my classes (I'm a lecturer), the DM (OP) called it as he saw it, I believe posting here is enough in the way of soul searching and reflecting on his actions (as you state above).
Our OP is a good guy- you know it and I know it, he wouldn't have asked the question here if he wasn't.
I don't have enough info on the roof smashing half-orc guy, so far he sounds like someone having a bad day, or worse...
OP have a chat with your guy, explain the game your playing, and how you want it to play out (you could also canvass the players on the type of game they want to play of course), and make certain the repercussions for further transgressions- better still figure out with the player a personal dilemma/character trait or whatever to put his character's actions in to context- make him a more sympathetic character. Work with him, he may have a very good reason (above and beyond the quick way down) for his roof chopping.
If he turns out to be a [insert rude word here] then point him towards the door.
PS Alternatively is the half orc player 12?