The Mishna seems to be warning against rejoicing when wicked people fall and are punished but this seems to contradict a number of verses that say the opposite. The verse says "when the wicked are destroyed there is rejoicing".

A number of  explanations are given to answer this but the Holy Alshich and the Tashbatz explain in a similar manner that the Mishna is referring to your enemies  whereas the verse states the wicked . When the wicked are destroyed this is in fact a reason to rejoice as it shows Hashem's Divine Providence in which He Punishes those who go against His Will and cause suffering to the Jewish People. These are wicked people who haven't done anything wrong to you on a personal level and your rejoicing is purely in the fact that their downfall is a revelation of G-d's Providence. The Mishna on the other hand is referring to your enemies, these are also wicked people but they are your enemy, meaning they have perpetrated some type of wickedness against you on a personal level. Rejoicing in their downfall isn't usually because it show's Hashem's Providence but because it fulfills your desire for personal revenge against this person. To rejoice in that is a very bad trait, and a person can think that Hashem is Punishing his enemy because he is carrying out his personal desire's (because he is a righteous person). For a person to think that someone else is being punished because of the wrong they did to him is not a good attribute and is what Shmuel HaKatan is warning against.  

Shabbat Shalom,