You are 100% correct. Our daughter is four years old so I've only been paying attention to parenting for that long. After watching the parenting style of our daughter's friends, its no wonder the schools stock up on Ritalin. The moms absolutely will not do anything other than verbally reprimand their kids. I can't tell you how many times I've heard "ok, Brandon, one ... two ... three..." then nothing happens. Well, what do you think the kids do? That's right, they totally ignore their parents! There is no reason for the kids to pay attention.
I'm not advocating beating kids or even spanking them (we've spanked our daughter a couple of times and it wasn't effective). What works is to physically remove the child from the situation. Of course, the scene created is embarassing but you only have to do it once or twice and your child gets the message (ie. Mom or Dad mean what they say). Instead, the moms we know are burned out, complain about their kids, and are generally miserable because their kids run them ragged.
Children aren't born knowing the proper way to behave in a civilized society. They need to be taught how to behave. They need to learn the boundaries. Naturally, they'll constantly probe the boundaries. That doesn't mean that they're intrinsically bad and need to be drugged into submission!
One final note and one that may ... may ... indicate that some sanity is returning to the child care profession. A neighbor had placed her boys in an "early intervention" program for pre-K. She thought they were learning disabled and borderline autistic. Our daughter had played with them a few times and I never really noticed anything wrong with them - they were quiet but not abnormal. Anyway, after a year the mom took them to a different doctor and complained that their behavior hadn't improved. The doctor said, "There is nothing wrong with your boys. Get them out of EI and pay attention to them. That's all they need."
Ok, I'll climb down from the soapbox now.