I'm studying the life of Moses with a bible study group, and we've just come to the part where God announces He will be coming to the mountain to speak with the Israelites. He's told the people that they are to consecrate themselves for the three days leading up to His arrival. In Exodus, vs 19:12-13 I was amazed at the specific treatment of those who touched the mountain. They were to be killed by stoning or arrows. God is a Holy and Loving God, but still approachable on His terms, not just ours.
This limit (law) was ordained by God, to kill whoever violated it. There are a few other scriptures I recall that sanction stoning as a form of punishment too.

So I think there is a place for capital punishment, but the question is whether we are using it correctly. Earlier in Exodus, Chapter 18: 13- Moses took a position in judging the people of Israel. Because the work was so vast, his father in law suggested that he appoint other capable, God-fearing men to judge their own. In Leviticus 24:12 it says, we read the response to what Moses did with a lawbreaker, "They put him in custody until the will of the LORD was made clear to them."

Because we have removed God from the judicial system, and are relying solely on the will of people (who may or may not be capable God fearing men)- I think we are certainly failing in our ability to sanction death as a punishment. We've taken it away from God, and put it into the hands of a "mob" of common people who could be influenced by outside influences, including satan.

Holocaust was a tremendous example of when man makes a decision to punish by death. This action was driven by hatred, such actions could never be sanctioned by God. God uses the death "penalty" as a just and righteous action, sobering, and meant to be a resolute response to a forbidden action warned against first. Genocide and the Holocaust were(are) not penalties, but rather an attempt at prideful dominance by man.