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How they handled it:

That guy from The Karate Kid is bullying some kids in a lunchroom. He's been doing it for a while, and up until that point, the lead male character has been doing his best to ignore him. But he finally reaches a breaking point, and decides to lay a verbal smackdown that the bully will never forget.

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Not only does he start loudly belting out insults to a guy who is known school-wide for beating the shit out of people, but he does it from the top of a cafeteria table, perched tall so that everyone can see who is delivering the burns. The bully gets shut down so badly that his girlfriend dumps him and even the nerds rub it in.

But in reality:

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That would have lasted about six seconds with an actual bully before he jumped up onto that table and fed him the rest of his lunch through his ass. You have to remember that these people thrive on ego, and the character in the movie was getting his stroked by fucking with weaker kids and ruining their lunch. He didn't beat them up because he didn't have to. But when that guy took away the one true power he had over them, the bully resorted to, "I'm gonna beat the shit out of you!"