Yes, and in the next arc they're fine. Deku got seriously fucked up for punching with his full strength, to the point where he can't do it without permanent damage. Which led to the creation of his new fighting style. The self-damage is so much more purposeful here.
Except you didn't even refute his point, because Deku doesn't often win by "punching harder."
Luffy is good, but so devoid of depth that saying he's "better than Deku" is absolute nonsense. He epitomizes shonen. He fights for his friends. He eats a lot. He's dumb. He's irreverent and fearless. He goes to extreme lengths to save people. Granted, the execution on him is actually pretty good, but there's nothing new or interesting about him. He never actually rises above his archetype, so I'm never genuinely invested in his character. Sure, I can't lie and say I don't get absolutely pumped when he manages to defeat a powerful foe, but Luffy for the most part, punches his way through problems and nothing else.
Deku is so much better on the character front. His character isn't nearly as repetitive, there are lasting consequences for his recklessness, and the plot doesn't bend itself backwards to make him out to beat the main bad guy. The character is sympathetic as fuck and immensely relatable because he comes across as an actual person instead of a beast that moves on instinct. He's introverted and a dweeb, but passionate enough to convince others without the author lying to the audience (ala Naruto's talk no Jutsu).
And his powers rock. His take on "super strength and super speed" is interesting because he's forced to work around his limitations. The lore behind his power alone puts above "fire and ice, explody man, acid, etc."