Pain is a highly evolved way of telling humans to change their behavior. Why would we choose not to use such an excellent tool, within reasonable boundaries? Also, do you think the victims of bullies have a pleasant experience? Being merciful to the bullies enables them and is cruel to their victims.
Yeah its so evolved. But then why limit it to children? Why shouldn't your boss be allowed to beat the shit out of you so it sends a signal you need to change your behavior?
There is a massive leap between "let them bully other kids" and "we have to cane them" and pretending like only pain is the solution, especially in case of children where bullying is often a second order effect, is sick.