I don't believe in punishments, actually. Not the ones you set up.
Ya know, I read somewhere once, and it really struck a chord that when you think the child least deserves a hug is probably when it is most needed.
Setting up an oppositional relationship will backfire at some stage. It doesn't mean you're 'soft', as in 'weak', it just means you are 'soft', as in, compassionate. I decided a little while ago that I'd prefer to be DS's soft place to land. I don't bother with withdrawal of toys, privileges etc, because I remember those feeling as good as a slap in the head, when I was little, and I clearly remember them doing nothing to instil any sort of respect, let alone a 'lesson'.
I agree with this, hence getting them to decide on consequences rather than punishments. It doesn't have to be something horrible or long lasting, maybe that they have to sit down quietly until they are ready to talk nicely. Maybe they think it would be fair to have to do the washing up an extra time this week. For some kids you might decide that running around the house 3 times is good as it clears their head. There doesn't need to be yelling, just a reminder of the previous discussion and what was decided then. All you want is for them to stop the behaviour and think twice about it next time.The important thing is that they are involved in a discussion about what is and isn't appropriate first and they understand when they are out of line.

In this case however, I think the consequence has been handed down and needs to be followed through on. Next time can be dealt with completely differently. It is quite possible that we are talking about a very strong minded 8 year old boy who will never respond well to threatening situations where he is yelled at and punished. He may respond very well to be spoken to like he is a bit grown up and knowing what he should do instead of the yelling and insults.