The American anarchist writer Paul Goodman described his position as being "a fist-fighting pacifist", and that has always seemed a pretty morally sound stance, in principle at least. Though I doubt if either Paul Goodman or myself would in practice be too likely to come out winner in a fist-fight.

So I don't see anything inconsistent in the narrator's actions or reprehensible in his wife's. As for the bully, anyone who pulls out a lethal weapon in a fight has no call to object if it ends up being used on them. And I'd read it that the wife is 'cold as clay' because she's in a state of shock at the whole episode.