Even during the time where it didn't do any damage, a pugsy is still pretty much the biggest 'f*** you' a player can do to the server. Nobody accidentally Pugsy's, and if you do it, then you have to live with the consequences.
It's bad because you're doing something on purpose with the intention to harm. No matter who it is, it's a perma-ban. You won't get let off just because you know people. It's always a perma and that's it. So don't do it folks!