The violence itself is merely a dramatic device: it is the agon, the struggle, embodying the actions of characters in physical conflict. It is not unique to horror, and shouldn't be classified as such. Instead, it is one way of providing a catalyst and driving a story forward.
Our reactions to violence come down to taste, experience, and story necessity.
If we understand a particular genre's conventions we have a better understanding of how the action serves the story. On the other hand, if we come into a story with a different set of expectations than the author, we're going feel that conflict very keenly. This is either because we haven't developed a taste for the genre, or because our taste level is more developed and looking for something more sophisticated.
Similarly, as we learn, study, and mature, we gain more experience with different storytelling forms. This experience hardens us to some things and teaches us that we've seen enough of others. We are better able to discriminate between what is and is not tolerable.
Finally, and most importantly, taste and experience will help us to know when some things are appropriate to a story and when they are not. We will recognize when something is gratuitous and not contributing to the narrative, and when something (however unpleasant) is really pushing the argument forward and making a larger point.
But either way, this does nothing to teach us about horror or the weird tale. For that we must return to the master: Lovecraft. In his essay "Supernatural Horror in Literature" he draws a clear distinction between weird fiction ("fear-literature") and "the literature of mere physical fear and the mundanely gruesome":
The true weird tale has something more than secret murder, bloody bones, or a sheeted form clanking chains according to rule. A certain atmosphere of breathless and unexplainable dread of outer, unknown forces must be present; and there must be a hint, expressed with a seriousness and portentousness becoming its subject, of that most terrible conception of the human brain--a malign and particular suspension or defeat of those fixed laws of Nature which are our only safeguard against the assaults of chaos and the daemons of unplumbed space.For Lovecraft, horror is more than blood and monsters, ghosts and goblins, it is even more than tentacled, squid headed gods of the deep. It is a profound sense of existential dread.
In a weird tale there is no shock, no sudden scare, but instead a slow accumulation of detail and sensation that upsets the balance of everything we take for granted as certain and good in daily life. We are forced to confront the possibility that we stand on unsafe ground and that there are forces beyond our understanding that will harm us through the brute force of their indifference. As human beings we have no significance and are beyond redemption.
If Lovecraft still speaks to us today it is because he articulated this fear better than any writer before him, and he paved the way for the paranoid style which followed in postmodern literature (Pynchon, DeLillo) and science fiction (Dick, Serling).
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Listening to: The Cure - A Thousand Hours
via FoxyTunes