First, I do not use physical punishment with my own children and have never recommended the use of physical punishment. I have found that positive behavioral strategies, natural consequences and logical consequences work much better.
I think that what confuses people is that punishment works:
Pinching, like most punishments, will stop a behavior. That's why, "It keeps kids in line." In fact, the psychological definition of punishment is any consequence that decreases the probability of a behavior occurring. So, if your definition of "works" is "stops the behavior," punishment works. It works at a cost, though.
First, it does not teach children the behaviors that you want them to do instead. It decreases the undesirable behavior, but does not increase desirable behaviors. It's like a "stop" command: If you say, "Stop hitting," you leave open the option of starting kicking or pinching or various other misbehaviors. If you say, "Keep your hands and feet to yourself," then they know what they are supposed to do. (Of course, the creative child might spit ...)
Second, physical punishment teaches, "Might means right." It teaches children that the appropriate response to misbehavior is violence (even if mild violence), and that it's "right" to cause pain in others if the others have misbehaved. That's not a lesson that I've wanted my children to learn or that I want my clients to learn. (I'm a child neuropsychologist.) In this world, I prefer teaching my children that there is almost always a solution to a problem that does not involve inflicting pain. If they misbehave, and my response is to cause them pain, then I'm teaching them that my solution for their misbehavior is to cause them pain. Yes, it stops the behavior, but it also teaches that it is ok for me to cause them pain because "they deserved it." Oh, and also that it is ok for someone bigger than they are to hurt them.
Third (related to my second point), young children, especially very young children, don't always recognize the differences that adults might recognize between the situations in which it is ok to hit (for example, for some families, when a parent is mad at a child for misbehaving) and when it is not ok to hit (for example, when they are mad at another child). Instead, they may notice that their parents believe that it is ok to hit or pinch them and understand that as it is ok for adults to hit or pinch children, but not ok for children to hit or pinch children. Children who are punished physically are more likely to try to control their environments by using physical force (to hit, pinch, or kick to get what they want).
Finally, punishment works as long as the threat of punishment is there, but not when the threat is not there. It is effective based on fear, not on learning what is appropriate.
Sorry for making this so long. I just feel really strongly that hurting children, although it will stop a behavior, does not teach our children the lessons that we want them learn.