Funniest shit is that this is basically how IT was eventually defeated. By being ridiculed and laughed at.
Well, that and a preteen orgy ("no, it was a train!", yes I know).
That's why he could only watch the disrespect: The very act robbed him of the power he weilded. In that moment, he was nothing more powerful than a human stuck in a sewer, watching a child literally shit on the thought of playing with him.
Thank you for succinctly summing up why this scene was powerful and not just smut for the heck of it. A lot of people have issues with that scene but this is the exact reason it's in there.
You know more than I do. I attempted to read the book at one point, but my sister stole it so I didn't get that far, and wasn't invested enough to track the book down as an adult, or watch either movie.