It was a pretty common feature of the schools I grew up in.

My second-earliest school memory was being asked to sit on my nametag in Kindergarten (the standard time out). We were doing an activity where we were supposed to circle whether something made a short or long O sound, and were listening to an audio tape with headphones. The words were printed on the worksheet, though, so I went ahead and circled all the correct ones and then sat quietly doing nothing. When the aide noticed she sent me to the tag on the carpet and then everyone forgot about me because I was so quiet. I would guess I was there for quite some time, but my 5 year old notion of time was wacked.

I have many more memories of similar things: being punished for doing math problems in different ways, or completing work early, mutually agreeing to play a board game by different rules during "free time", or responding to an essay prompt in an unexpected way.

I am now a teacher at an independent school which my 3 sons attend. Faculty tries really hard to avoid doing this. It is aggravating and difficult when you have 20 kids and a subset go off in a completely different direction than you were hoping to reach with the activity. I can totally understand that with larger classes like most public schools have, a worse behavior baseline, etc, how one would be tempted to leap to chastisement.