"An individual purchases a litter of puppies. For his own twisted enjoyment, he brings them home, mutilates their genitals with garden shears, and then douses them with gasoline and lights them on fire. Is such an action not a concern of morality?"
Remember, all objectivist ethics is based on rational egoism. Thusly, there are actually two moral questions here:
What is the moral status of the person himself?
And what is the moral status of you or I hanging around him?
Based on this, we can quickly conclude that, for the sake of our own egoism, no matter what the torturer's level of morality for himself is, our own ethic, our own rational self interest, compels us to completely shun and stay away from this person. Even if it turns out he is doing nothing to harm himself, watching someone engage in wanton gore can't be good for one's psychological health, nor can socializing with types who get off on that sort of thing.
Now, onto his own moral stature. On the above principle, we must ask to what extent he is harming or benefiting himself. Grotesque does not immediately translate into Immoral. His own immorality is harder to grasp onto. One can immediately say that there is something pathological about his love of suffering, but this presents problems in that it suggests mental illness. Being insane, as it is not a matter of choice, is not an immoral act. Essentially, to call him immoral, you would have to somehow substantiate the odd, paradoxical standard of saying he is to some extent both deranged and sane at the same time, sufficiently sane that he can choose, of his own will, such derangement.