It's not wrong. In many contexts such a strategy is advisable. It's the theory behind mutually assured destruction. You personally aren't going to benefit from launching a retaliatory nuclear strike, but the knowledge that you'd do it anyway might just keep your enemy from launching a first strike. On a smaller scale, you can see this sort of thing going on in prisons and criminal organizations where appearing weak can turn you into a target.

One drawback is that while a reputation for retaliating against every wrong will make people less likely to wrong you, those who decide to wrong you anyway will make sure to leave you in no position to retaliate.

There's another drawback that occurs if you allow for miscommunication: retaliation against something you wrongfully thought was a defection can lead your opponent to retaliate against what he perceives is an unprovoked attack.

It all depends on the situation. Sometimes it's better to be more forgiving and sometimes it's better to be more vindictive.