Also, you're teaching them that authority is lazy, unfair, and unable to protect what is right. And then you'll be shocked when they don't trust you anymore.

The other side, however, is that you have to hold everyone accountable. Conflict has to be quickly and effectively deescalated or it engenders a culture of retaliatory violence. For a more concrete example "he started it by calling me a name so I smashed him in the back of the head with a rock."