The classic example is, your neighboring tribe steals a goat. You could chase after them, but then there'd be a confrontation, and some of your people would probably get killed. It's not worth a life for a goat. But then next week, and the week after, and the week after that, another goat is stolen. Each week the same calculus holds: one goat is much less than one life. In the aggregate, though, you've lost dozens or hundreds of goats. Too many.
On the other hand, you can respond to the theft of a goat disproportionately. You can chase after the thieves, confront them, beat them, kill them. Some of your people will die, some of their people will die. Next week, they don't come back to steal a goat. A goat isn't worth one of them dying over, either. Your tribe has a reputation of "not to be messed with", and the thefts stop.
It may be the horrific underpinning of all types of warfare, from gang to nation-state, but it is pretty rational, and provides a solid reason to spend a thousand bucks prosecuting a 5-cent theft: it's not about punishing the 5-cent theft, it's about preventing the future aggregate theft of thousands of dollars.