I think it ceases to be a good form of punishment when it's repeatedly used. I built a resilience toward spanking. In one hand it meant that the threat of the punishment, and the punishment itself was ineffectual, and in the other to regain efficacy it would've required escalation—fortunately for me it began and ended at spanking.
I think the issues are manifold, though. People willing to step outside the line and assault and or batter students are willing to break the rules for one reason or another. For instance the aforementioned resilience.
The natural social dynamics one would reasonably expect to play out are fettered by the rules, irrespective of the nature of retaliation. Fighting in retaliation, bullying in retaliation, shunning, shaming and so forth—all beyond the pale.
Teachers and admin are then deferred to, but the tools at their disposal are, from what I experienced and saw, pretty minimal. However they carry the unnatural burden of handling belligerents while maintaining professionality is a difficult tight rope to walk, and frankly ineffectual, but this is worsened when the students can be part of a protected class. At this point the school assumes legal liability for their treatment.
With a chronic misbehavior you end up with a treatment-resistant student, and with that it saddles the parents almost exclusively with the governance of their children. This can have mixed outcomes, if you can imagine, spanning from extremely responsible to complete absenteeism.
I think in an ideal situation the prevailing culture would be one where students self-police, within reason, as they're allotted the most freedom in interacting with one another, but we've largely wrested their hands in these contexts and bred a culture of bystanders in so doing. And I think that is seriously problematic and has had long-running consequences on the culture at large.