"...the citizen trying to enforce the rules gets the punishment!"
Because while we have a citizen-based police force, the unsworn citizen is unaccountable and therefore has limited authority to "enforce the rules". If s/he chooses to try, especially through violence, then s/he must be prepared to go to court and justify the action. The court will decide whether the 'enforcement' was warranted and proportional.
"Apparently in the UK it is illegal to beat the crap out of anyone breaking into your house to steal your hard earned property or worse"
Taken literally, this is true - but only because you've used the term "beat the crap out of".
Otherwise, the notion that it's somehow illegal to defend yourself in Britain is absolute Daily Mail fearmongering nonsense designed to make people feel besieged even in their homes. No-one ever seems to bother questioning where this daft idea comes from, they just yammer it around the place with the authority of a pub lawyer.
If you find someone breaking into your house in the UK you are permitted by law to take whatever action is necessary to prevent harm to yourself; you are also entitled to take action to defend your property. You may choose to effect an arrest. However - this is the caveat - any use of force by you against an intruder will, again, have to be justified before a court. As long as your response was proportional - which is to say you used sufficient force to defend yourself, prevent the offence or detain the offender and *no more* - then you're very likely to walk free. The expectation of proportionality is not unreasonable in a supposedly civilised country.
Bear in mind as well that changes in emphasis in recent years mean that courts are obliged to recognise a homeowner's state of mind when confronted by an offender, meaning that if the homeowner reacts out of fear, then excessive force may be overlooked - but don't rely on this as an excuse to "beat the crap" out of someone and expect to get away with it.
(By the way, you're not *advised* to try to detain the offender - but this is more for your safety than because of his 'human rights', or somesuch. Technically if you take action to detain the offender you've gone beyond self-defence by definition, so there are potential legal issues here, and you're more likely to be pulled up on a technicality. You'd also likely lose any 'state of mind' justification, because if you're trying to arrest the burglar you're clearly not that scared of him.)
"if you do you get sent to jail and the crim gets a hefty compensation pay out."
Not normally. If you use disproportionate force to deter or apprehend an offender then yes, of course you may get sent to jail - but don't we demand the police be held to the same standards? Aren't we quick to bellow about police brutality if it's considered they use more force than was strictly necessary? How many anti-police rants have there been on El Reg on this very subject? The same law governs us all, doesn't it?
As for compensation, unless it's ordered otherwise a burglar has as much right as anyone else to try to sue if he thinks it'll get anywhere - but I'm struggling to find any cases in Britain where such a claim has succeeded. Yet you give the impression it happens a lot. Can you cite such a case?