Re (d): Look, I'm a pretty big guy, and I just don't get fucked with all that often. I also grew up with a brother one year younger than me, so I've exchanged my fair share of punches. I don't think it's good to be afraid of physical violence. Would I like my kids to be able to stare down a bully? ABSOLUTELY.
However, I'm unwilling to confine their responses to playground violence. I don't think anybody should be willing to do that, if only because so many people can't reasonably expected to play this BS game on the bully's own terms, and having your own kids play along makes it that much harder for them.
Humans are pack animals with a social order. By suggesting your child escalate confrontation out of the pack at all times, you have ensured that the bully remains their superior to them when the higher authority is not there.
There WILL come a time in life when your child has no higher authority to appeal to. If they aren't able to establish their own place in whatever pack they are in, it will be established for them, possibly in ways that are not in their own self interests.
(b) Kids are not dumb. They use violence because it's a viable form of intimidation, particularly for males. Adults use violence too. Violence is alive and well in most blue collar male dominated jobs. The act of not being an easy target is specifically addressed by fighting back. You can't project an image of "If you screw with me, I'll make life difficult for you" as an adult if you aren't taught this as a child. This has a huge value every damn day you are not mugged, picked for a car-jacking, or otherwise selected by those people looking for easy targets.
(c) Physical violence is a subset of bullying in pretty much every standard definition. The reason for this is that males tend to solve their issues through force, while females tend to use other methods. If you separate only the male response as something worth addressing, I think you are missing the underlying nature of bullying.
(d) If you punch me, even now as an adult, you're getting your ass kicked; or I'm going to at least hurt you as bad as I can. That being said I don't think I've been punched since I left the army 13 years ago (And before then, probably once or twice in high school). I'd like to think that's because most people - even those inclined to resort to violence - can instinctively tell that would be a bad idea, or at the very least, a difficult task.
As an aside a story:
In 2001, I moved to Vancouver, BC. I was about 26 at the time. As I lived next to the beach, I decided one night to go for a stroll. It must have been about 11-12PM or so. The path by the beach was dark and away from the street down a hill, and at this time of night, almost devoid of people. I liked the water though and being new to the city felt relatively safe. As I was walking, I approached two men (probably late teens early 20's on a bench). One had a bike and one was on foot. As I got closer, they both said nothing to each other. The one on the bike started to ride on the path towards me. At this point I could see they were the stereotypical young b-boy punks. The guy on the bike got closer, slowly. I looked him straight in the eye as he passed and heard him circle around behind me.
I kept on walking, same speed and gait. As I passed the guy on the bench, I looked him straight in the eye as well. You could feel the tension, but I pretended I didn't and just kept walking. The guy on the bike stopped at the bench, now behind me and that was the end of it.
I'm convinced that those two goofs were up to no good. They concluded however, that I wasn't worth their time.
Take it for what it is, but don't ever think for a second that you aren't part of the jungle of primal human behaviour that is very much alive and well.