I'll be honest; I've been stepping on bugs my whole life, often on purpose or for no real reason.
Of course there's never a "no real reason" scenario if you in fact made a choice. If you mean your leg suddenly acted involuntarily outside your control as you helplessly watched, I would suggest you set up an appointment with a neurologist. But assuming your body isn't malfunctioning like this, it is clear you were making a choice, but the underlying motives for that choice may escape your own awareness and in that sense are "outside your control", acting impulsively, lashing out, hitting, thrashing, killing, etc.
I think what your friend was calling into question is why you make choices to kill living things for sport, when it serves no purpose other than an individual exercise of power over other living things. In other words it is serving only a baser, more selfish need to smash an insect for the sake of power over it, such as the 12 year old who smashes a caterpillar just to kill it. I think if you were both 12 he wouldn't have questioned it. But he is questioning a young adult who continues to act like that, because at a certain stage adults should at least move beyond this need to dominate others in order to have self-power. In other words, it's immature.
Then again, it is a positive quality for those who go into such careers as politics and finance, where viewing other living creatures, human or otherwise, as objects to manipulate for self-gain is the sought after quality. I think how we see the world, becomes ultimately a reflection of how we see ourselves and our place in it, as an exploiter, or a steward of it and others.
If bugs are reincarnates of people, well... my thinking is better luck next time. Probably did the little guy a favor... maybe the reason uncle bob or grandma jane crawled up to a giant white sneaker was because they wanted me to crush them out of existence.
Rationalizations only exist when there is a twinge of doubt concerning ones own actions. We wouldn't need to seeking for self-justification if we truly were at peace with ourselves and our actions.
What are your thoughts? Is it wrong to step on bugs? Why or why not? Would I be considered a cruel god?
I think you're questioning yourself.