No, this isn't about shooting the bad guys with an oversized gun designed to compensate for the hero's masculinity issues. This is about when a villain's potential goes to waste. When, despite the hype, they're barley on the screen (looking squarely at you, George Lucas, for Episode I) or in the book. When the author makes a big deal about just how evil, and powerful, the villain is, or has created a really great villain... and then doesn't do anything with them.
I have a particular author in mind for this little rant, but I won't name names. (Other than George Lucas... because, really, as much as I like Christopher Lee, Darth Maul deserved more screen time.) Mostly, in the case of the unnamed author, it seemed as though the villain had been relegated to the role of sub-plot, and if you're going to do that, it's all well and good providing that 1: it's the kind of thing you usually write so the audience has no reason to expect otherwise and 2: you don't create a really cool villain that you normally would have done lots with.
This was something I thought Silence of the Lambs did well. Aside from the screen presence of Lecter, he lived up to his potential. He wasn't just the scary guy safely in the glass cage. He gets out. Better still, though he is the subplot, the main villain is also satisfying. (Neither the movie nor the book would have worked half so well otherwise. Sub-plot should never completely overshadow plot.) It was also something the movie sequel screwed up, namely because the director, whom I normally enjoy, went for the shock ending. Only the Lecter we all know and love would never have allowed himself to be in that position.
(Not to mention he doesn't have to amputate his hand. Far less risky to simply take off the thumb, if it comes to that.)
Which illustrates another peril here: you can waste your villain with a single mis-timed scene. Something that doesn't ring true to character. At that point, you leave audiences scratching their heads and wondering what happened to the villain they've been watching all along. Hannibal isn't the only film guilty of this. (The book avoided this pitfall, but fell into another one.)
Mind you, some of those wasted villains have provided me with fodder for my own evil characters. I fully plan to steal the concept for one villain from a certain author who didn't know enough to use what she'd created. Well, "steal" is such a harsh word. I intend to appropriate and use for my own ends.
If you're going to create a strong villain, then you ought to use them appropriately. If not, you might want to start asking yourself if your story needs a villain at all, or if perhaps the motivation for your characters is something else entirely. Villains should be treated like the famous gun Chekov talks about: if they're there, they ought to be used.