Peter, people do use the world evil to distinguish acts from merely "morally objectionable behavior," or wrong. In this case intellectual charity and a little contextualism is in order in order to understand the meaning we might imagine Thompson was getting at.
There is a difference between these two acts: a mass murder and a five year old shoplifting. The difference lies in the severity of the consequences of the acts, the motivations of the individuals performing the act, and in the degree to which it is objectionable. Dictionary definitions have no de jure or de facto control over what meaning, or use, lies behind words. The argument ad absurdum you presented showed that quite well. We might imagine that it is a different meaning that Thompson is implying, since the acts of Britain were, to many, morally objectionable and yet he draws a distinction between that and evil.
"When one encounters Evil, the only solution is violence, actual or threatened...[distinction provided between evil and wrong]" -OR- "When one encounters behavior that is (morally) objectionable to a certain extreme degree both in regards to the act itself as well as, possibly, to the imputed or imagined motivation, and there is little hope for change the only solution is violence, actual or threatened...[distinction provided between such behavior and wrong]"
It is not irrational to not waste words, assuming some intellectual charity will be provided. Even though he used the sticky word evil, he used fewer words to say something essentially like this:
Non-violence against some people/groups simply will not work because they simply don't care, are perhaps sociopaths with no conscious, or are perhaps delusional/unknowledgeable (and undeserving of blame) but persist in this mentality and behavior that affords no likely solution except violence or the threat of violence and there is a distinction between between such behavior and merely wrong behavior, where pacifist responses may work].
When I first read the quote, I understood something akin to what is above.
My point, though, is that since genuine meaning is understood by many individuals when the word evil is used it is not irrational to use the word. The word evil has various meanings but we can allow that there is some concept conveyed by it that is useful in its distinctions between other words.
The fact that there is a lot of emotional/inept-philosophical baggage to the word does not mean it is irrational to use it.
Perhaps there is no objective morality and perhaps it is irrational to prop up personal subjective moralities, non the matter, the word evil, as it refers to concepts referring to things in the world, can be used to convey distinctions, and can be used rationally.
"People don't buy three-eighths-inch drill bits. People buy three-eighths-inch holes."
-- Michael Porter
"I feel more like I do now than I did a while ago."
-- Arifel
"Know thyself, because in the end there's no one else."
-- Living Colour, Solace of You
"Student motivation? I'm gonna start hooking you all up to electrodes."
-- Kevin Giffhorn
"A rock pile ceases to be a rock pile the moment a single man contemplates it, bearing within him the image of a cathedral."
-- Antoine de Saint-Exupery
"I found one day in school a boy of medium size ill-treating a smaller boy. I expostulated, but he replied: 'The bigs hit me, so I hit the babies; that's fair.' In these words he epitomized the history of the human race."
-- Bertrand Russell
"Open Source Software: There are days when I can't figure out whether I'm living in a Socialist utopia or a Libertarian one."
-- Alex Future Bokov
"Supposing you got a crate of oranges that you opened, and you found all the top layer of oranges bad, you would not argue, `The underneath ones must be good, so as to redress the balance.' You would say, `Probably the whole lot is a bad consignment'; and that is really what a scientific person would say about the universe."
-- Bertrand Russell
"This thing not only has all the earmarks of a hoax, it has "HOAX" branded into its flank and it's regulated by the U.S. Department of Hoaxes, Pranks and Shenanigans."
-- Brunching Shuttlecocks
"Natural selection gave a big advantage to those who were good at spotting the pattern of a saber toothed tiger hiding in the bushes, but no advantage to those who were good at solving partial differential equations. It is not mere rhetoric to say that in an absolute sense a janitor has a more intellectually challenging job than a professor of mathematics."
-- John K. Clark
"The simple fact is that non-violent means do not work against Evil. Gandhi's non-violent resistance against the British occupiers had some effect because Britain was wrong, but not Evil. The same is true of the success of non-violent civil rights resistance against de jure racism. Most people, including those in power, knew that what was being done was wrong. But Evil is an entirely different beast. Gandhi would have gone to the ovens had he attempted non-violent resistance against the Nazis. When one encounters Evil, the only solution is violence, actual or threatened. That's all Evil understands."
-- Robert Bruce Thompson