Link: http://news-releases.uiowa.edu/2010/february/020410abusivebosses.html

This study (excerpted here in the press release) shows that bullying and abusive leaders are often tolerated if they are perceived to be successful.
This is is no surprise to me. I once had the misfortune (in 1999) of working for a Vice President at Sabre who had no discernible interpersonal skills (I did not think this was possible, but the daily evidence backed up that unlikely reality). He was a classic tyrannical, bullying, obnoxious leader, yet his leadership style was quite clearly tolerated by Sabre right up to the point that he left the corporation.
In that particular case, the VP waited until I went on vacation, then took away all of my responsibilities (while neglecting to inform me until I went to see him on my return, after discovering that everybody in the team was treating me like I was radioactive) and told me to go find another job within Sabre. While classless in the extreme, the move was fortuitous in that I was able to find another role in Sabre and quit working for what is definitely the most interpersonally defective leader I have ever encountered.
The conclusion of this study is somewhat depressing, but quite understandable. A lot of corporate leaders, even when confronted with clear evidence of bad behaviour by leaders, will attempt to rationalize away the evidence, using a variety of tactics ranging from cynical, lazy and tired cliches (a classic one being "to make an omelette you have to break a few eggs") through to ad hominem fallacies, usually based on some variant of allegations that the evidence for bad behaviour is coming from "poor performers", "whiners" etc. etc. None of the rationalizations is at all plausible, but they are remarkably resilient when people wish to live in denial.
UPDATE - I found an interesting doctoral thesis that suggests that if you find yourself faced with a bullying leader, that collective action is a more likely route to effecting positive change.