You could focus it -- not hard. I'm not sure how powerful it would be, definitely blinding if it already hurts your eyes. Take it apart and experiment with different optics and things like that till you get it focused. In addition, you could also try running more power though the LED to make it even stronger, but you run the risk of destroying it. Also, I don't know the MCD of that LED, but you might be able to find a more powerful one cheaper than a mouse. Experiment!
As far as other household items with lasers, not many that I can think of that are able much less designed to be as powerful as you want. Try using mirrors and lenses to focus a halogen bulb! Some spot lights that use these can easily blind you with a beam thats about 20 cm (I guess, not good with metric). Try focusing heat lamps that are for lizards. They put some serious heat out as is -- not to mention if it was focused into a beam! Mod a strobe light (one of those blindingly bright ones) to stay on, focus it, and you've got some bright light. Like I said, experiment!
Read the "tutorials" page. You could make a burning red laser at cheapest for $30 (and goggles), but if you wanted a more powerful, more reliable, and more portable one, you could make it for about $100 (and goggles). Sorry, but the mouse idea just won't work for a laser.
My mouse (Logitech MX Revolution) is an actual laser mouse... It requires 800mA to run (and is wireless, so a lot of that's going to the antenna, not the laser)
It says it contains a "848nm Performance LASER" which if viewed at the perfect angle appears as a dim red to the naked eye, though my camera picks up a blinding wash of light it interprets as a whitish purple.
It'd be hard to say what power it is without ripping it apart, since I have no idea how bright that wavelength should look, nor my camera's sensitivity to it... A power meter would be pretty useless too, since it's pulsed, and it looks like the mouse progressively lengthens the pulse the longer the mouse idles.
It's pretty safe to assume it's under 5mW though, since it's exposed like that and I'm sure it has to pass some sort of regulations for eye safety.
You could focus it to possibly cause eye damage. But you could probably get a stronger red LED at Home Depot without having to take your mouse apart. I had a pen that lit up blue, but it ran out of ink, so I took off the front half and cut the tube. With the LED exposed, I took the front half of an Axiz module and put in two lenses from my broken greenie where the spring was. I stuck the LED where the diode goes (Perfect fit!) and pressed the light on button. The two lenses combined with the AxiZ lens and the LED almost made a laser! The dot was about four or five inches across ten feet away! I managed to lightly write on a glow and the dark toy from a few feet away. The color was around 473nm.