From a psychological perspective, use of punishment is, in most instances, less successful than use of reward to shape a behaviour. However, punishment is often misused by parents. We know that many are too rough, but the reason why we have so many parents frazzled by undisciplined children is that most of us are not using strong enough punishment. It is hard to use strong positive punishments (punishing by adding something, like pain for example), like corporal punishment, in the intensity (or in a timeframe that is close, or contingent, enough) necessary. Negative punishment (punishment by taking something away) can be more effective, and is easier to administer. Take away his freedoms, his toys. You will still need to be careful to administer punishment in the correct intensity. For example, negative punishment for speeding (fines) is not a strong enough punishment or deterrent to be effective. If a 3 year jail sentence was handed out for exceeding 5km/h above the limit (obviously excessive), I don't think it would be a problem.
In the case of hot saucing, it is a positive punishment intended to cause pain, and can be treated like other corporal punishments. That is, I wouldn't recommend it, unless you have a very high degree of expertise in behavioural shaping. In my opinion, though, it is still a notch above spanking/hitting, as there is no potential for real physical harm. Sticking to rewards and strong enough (salient) negative punishment, reserving positive punishments for few, occasional cases. Keep in mind that positive punishment does not necessarily mean corporal punishment.