Don't you get it? It's all just a big fairy tale!
Specifically: the scene where he summons a council of witches where he first starts out as a loving patron, scolds them about letting Shrek escape and finally snaps into rage, killing one of them on screen by pouring water onto her. After Shrek escapes however, he drops all the niceness and starts threatening their lives, never mind that he was the one that pushed Shrek too far. He seems like a good one at first, letting his witches having a rave in his castle and all that. When he finally gets it, he does enjoy it for a bit until he realizes the consequences of his wish and how important he truly was in the grand scheme of his world.
After he agrees to trade off one day from his childhood that he doesn't even remember in exchange for one day of romping and terrorizing in an alternate timeline supposedly free of consequence, Shrek realizes that Rumpelstiltskin took away the day that he was born. It just so happens that after angrily storming out of his own children's birthday party he gets just the opportunity he was looking for from the smooth-talking Rumpelstiltskin (Walt Dohrn). The story follows Shrek, married and now the father of three ogre children, who finds himself in a rut, longing for the days when he was a "real ogre".
Shrek Forever After (also known as Shrek: The Final Chapter through promotional content) is the fourth and final installment of the Shrek tetralogy released in 2010 under DreamWorks Animation.