What a miserable situation. Kissing the boy on the lips while voluntarily carrying him back to his home in broad daylight is really awkward and weird, but does not warrant going to the police. I hope to god for the kid's sake that this was an isolated incident and that the parents are not actually that pants-on-head retarded.
Mr. Not-Hitler deserves to spend the rest of his life in the looney bin for his response to the incident, and the family by no means deserved to be tormented, but it's still tragic that his apparently fragile psyche was ultimately shattered by the short-sighted, irresponsible, and naive stupidity of two people who had just moved into the neighborhood.