Calling someone by something other than what they typically go by is simply a means to get under their skin and belittle them in a way. In response, that person (or their supporter), has the option of either ignoring it (and risking it sticking) or objecting to it and coming off looking petty by arguing about a name.
I have a partner who would never seem to get opposing counsel's name right in Court. He would say "Your Honor, Mr. Weaselboard is lying to the Court!" (when the guy's name was something vaguely similar, but not really). It would drive the guy bananas, but if he ever addressed it, he'd come off looking really petty when my partner would simply claim to have misspoke. While not exactly gentlemanly, it was pretty hysterical.
I usually make it a point to butcher the names of some jerk my wife works with or anyone who seems like a real ahole. "Hey, nice to meet you Klen....what kind of name is Klen anyway? Right, right....Ken, sorry. Do you want anything from the bar, Klen?"