I think we overlook just how terribly cruel and callous he could be rather than just being insensitive. Like in Job Fair when he rejected a kid for being too ugly, or when he pretended to fire Pam as a joke and immediately blamed it on Ryan. Imagine a real boss harping on an employee like he does to Toby throughout the whole show- bringing up his divorce constantly, calling him a rapist, physically slamming him down at the ice rink, intentionally leaving him out of a beach trip- it would be lawsuit city and the epitome of a hostile work environment.
He also downright insults and harasses anyone in the office he deems to be unnatractive or unpopular. He makes fun of Meredith's looks, Phyllis's weight, Angela's height, Oscar's gay-ness, Kevin's general appearance and Creed's age openly without ever apologizing. He reacts with laughter upon hearing that Phyllis was essentially sexually assaulted in the parking lot. In a real work environment the way he talks to and about Pam would absolutely be considered sexual harassment- my roommate got instantly fired for a lot less than Michael gets away with for years. And he does straight-up expose his genitals to Pam by telling her to come in when she knocks while he's changing.
He also treats Dwight like a dog up until about Seasons 4/5 when Dwight becomes less of a suck-up. He puts him down constantly and dismisses him as stupid when Dwight tries to act like a friend. Michael has absolutely no regard for Dwight's well-being after Dwight suffers a serious concussion and tries to make his grilled foot seem like a bigger deal.
He also reacts completely selfishly upon hearing that one of his longtime employees may have skin cancer. During the suggestion box meeting, he shows that he completely forgot about Tom, an employee who committed suicide after reaching out for help relating to mental illness, and says with a disgusted grimace "that guy was weird" after being reminded of it.
He also coldly throws out the elderly founder of the company after inviting him to speak about ageism.
On top of all that, he hits one of his employees with his car and is then immediately concerned with how bad he looks to his employees after and desperately tries to get her to forgive him in front of everyone.
Tldr: I could keep going- but my point is that objectively, Michael Scott is shown to be an unbelievably selfish individual over the course of the show. It's really a testament to Steve Carell that he manages to make him seem loveable.