What to do about a problem referee?
It is the responsibility of the editor to not select him, and they are negligent in that respect. You are perfectly entitled to go ahead with requesting a more fair and even-minded referee (which is your right), as you "do not see how this referee's requests possibly can be satisfied, no matter how much work you invest". 

Asking for him not to referee you and not selecting him as a referee is, of course, perfectly in your right.

Beyond that, there's not much more you can do from your side, and it is not your job to ostracise that person, even if you think they should be. Unless they threaten to take over a community (e.g. by being elected in a position of responsibility or similar), or you are responsible for hiring them into your department, my view is that you should let them be. Others may find reasons to appreciate their service, as hard as it may be to believe.