It certainly appears that way, especially with a final verse like
Happy he that takes and dashes thy little ones against the stones.
,
but only if one doesn't understand the context in which it was written.
Imagine yourself as a slave two or three hundred years ago,
captured in Africa as a child and brought to America
to work on a plantation.
It's evening and the man with the whip says to you
Sing us one of your N… songs.
Make it a happy one and there'll be a reward for you.
You hardly feel like singing a happy song, but you recall one from your youth and sing that. But instead of the original happy words, you make up your own, singing them in a language he doesn't understand.
By the banks of the Mississippi, we weep thinking of home. We will always remember Africa; let us be cursed if we forget. You ask us for happy songs when all we feel is sorrow. We will be happy when we see you rewarded, as you have rewarded us; Happy while you watch your house burning to the ground, And your children drowning in the Mississippi's mud.
That's hardly a nice song, but it does nicely express how you feel. It certainly doesn't mean that you intend to commit such deeds though, or that you really would feel happy should they happen. You are taking advantage of the situation, seeing the man thinking you are singing him a happy song while in fact you are singing the exact opposite. It gives you an ironic feeling of power over him.
That is exactly the situation in which Psalm 137 was written. The people of Judea had been captured by the Babylonians and taken into captivity as slaves.
They remained slaves for much of the 6th century BCE,
until Babylon was defeated by Cyrus the Great in 538 BCE.
This king of Persia allowed the Jews to return home
and even helped them rebuild the great temple in Jerusalem.
(It's ironic that this first Zionist
was the king of Persia,
a country now known as Iran,
whose current policy is the destruction of Israel.)