Is it true that over use of disciplining in an organisation is likely to produce pathetic employees who can never an asset to the organisation? Why?

Of course. There is a saying that goes something like "the more YOU pull, the more THEY let go". Over discipline should never be a part of an organizations policy. Three strikes (with proper measures) and you're out.

Yes, its true because over use discipline will kill employee's innovation and creatavity. It will stop new ideas to be implemented hence employees will never learn new things. Discipline should have some limitations but not at the cost of business ethics.