Personally, I think it varies from horse to horse how sensitive they are to pulling. Both of mine are your typical sensitive arabs, so I don't even try. I think it would just be mean to pull sensitive horses. A "trainer" that I knew thought differently, and they would pull all the horses no matter what. Often they would need to be tranquilized, with people holding them down, or they would just get a swift kick in the belly....it made me sick. However, my old instructor had an arab gelding that loved to show and knew that when his mane was being pulled he was going to a show soon. He stood for it and didn't seem to mind. Some less sensitive types also don't mind. I think it all depends, and it is only cruel if the horse is in obvious discomfort.
Oh, I also know a horse that needs to be tranquilized to have spring shots. Her owner would pull her mane when she was already sleepy and couldn't feel it. She pulled it short at first and it would last the entire season if she braided it right ;)