In my opinion, you need to try other measures of discipline and stick to it. My son turns 4 next month, and I do believe he understands full well right from wrong. He's quick to point out if we are using bad words, but he does test and take chances.
One of the problems we are having lately is meal times, where he wants to watch TV and have supper at the same time, on my bed. He only got into this habit because I had to keep him home for a week due to mumps, and had the domestic looking after him while I was at work. While she took really good care of him, he also had that much more freedom. At 4, no child needs that freedom.
As tough as it can be sometimes, the new rules are now - play, bath, supper, then TV for an hour or so. It is getting better each day, but I've got to stick to it. He takes chances, but I quickly remind him we have a deal. No fussing of any kind during supper, if there is fussing, then no TV at all.
The star chart has also worked wonders, kids love to be rewarded.
I must say, my mother also did the same to us, as you did to your son with the chilli, and we were no way near as naughty. I know you already feel bad, but it is rather cruel.
I also feel bad and guilty disciplining my son, but how else will they learn, and know boundaries?