See, in my school it was the other way around. People would act big, do the stupid little chest-bouncing, but no-one would have the balls to throw a punch. Things still got resolved, nonetheless.
However, in certain circumstances I believe it's the only way. A friend of mine was being bullied by two particular guys. Although my friend had repeatedly informed the teachers about the two, they were often given a single break's detention but would continue the very next day. Then my friend stopped informing teachers because the bullying would become more frequent and vicious (often physical) the following days after telling a teacher. After one such day he was having rocks pelted at him, being repeatedly shoved over, hit with sticks, whatever they could do to hurt him. It was pretty constant for about half and hour of rock-pelting and shoves, but my friend was scared to fight back since it was two against one and he was a rather passive guy anyway. I lost my temper, got into a fight with the two, and they stopped bullying my friend after that point because they knew it would lead to a punch-up.
It resolved the issue when other ways were either ineffective or plain stupid; my friend should not have had to hide himself away in his own school playground because of fear of bullying.
So yeah, I believe fighting is a last resort or a very good preventative.