There are times when Parents are right in their stand and there are times when they overdo. When it comes to rules I don't think it only works from one side. Parents and Kids should work together. But most of the time they are against each other.
Kids should know what their parents don't like them doing even before they are told. and if they do end up making mistakes Parents should sit down and make them learn instead of grounding or lecturing them. Seriously by grounding us the rebel starts automatically. Then it's not right for the parents to say that their kids are being rebellious.
From my experiences all I feel is that why not they understand me instead of arguing with me. Fine, I get your point but why don't you get my point also! Try to have some trust in your kids. But Parents are more scared of people outside the house then with in. All kids wants is to know that they have their parents to look up to whenever they end up making a mistake. We all learn from our mistakes. If parents ground them one time then next time the kid automatically knows that he is alone which will just push him to make a bigger mistake.
As far rules are concerned, Parents should place them only when needed. Don't keep on trying your kids every single second. But, unfortunately every small things in house has a rule! You can't do that, Do this, That is forbidden. Putting a stop on everything is definitely not for betterment.
Gee. That was a rather long post. In short I am on both sides it all depends on the situation and its demands.