Aren't respect and fear two different things though? Look at the "funny like a clown" scene Joe Pesci ad-libbed in Goodfellas. The implication from that scene is that the people aren't laughing because they find him hysterical; they're laughing because they're terrified of him.
Joe Pesci improvised that scene based on something that happened to him involving a real life Gambino mobster. I remember reading which one but the name escapes me right now - possibly Anthony Ciccone.