samuel - you ask "what's the difference here then?"
well there isn't one.
your dad should not have done that, same as these kids parents shouldn't.
just because something is not technically illegal does not make it ok.
boxing clubs allow this sort of thing for 5 year olds simply because they can and because, as this thread proves, there is always some idiot willing to send their kids there to 'toughen them up'
young kids are too young to understand why their parents are standing there baying and cheering as they get kicked and punched, and why they are being protected by the people who are supposed to.
it may be teaching them how to fight (or be thugs, which is what it amounts to), but it is also teaching them to hit first think later, to think their parents don't care, to feel frightened, worthless, resentful and angry.
it is parenting at it worst