A chronic pain patient with hypersensitivity to touch is a completely different animal than an acute disc herniation in an otherwise healthy individual. The former may indeed perceive axial injections as torture as their movement during the procedure deflects the needles (especially 25ga) causing multiple passes to be required. Pressurization of the neuroforamen even though the needle is in the posterior neuroforamen, can cause them to come off the table. The sedation is for the comfort and psychological well being of the patient- it is not for the physician. That is why we usually give general anesthesia for brain surgery. It is not necessary at all, but it is humane.
Patient perception of pain is not related to the duration of time the pain occurs but is related to peak intensity, that is modulated by sleep deprivation, chronic anxiety, depression, past experiences with pain physicians giving injections, cultural issues, and genetics. A bad experience with an injection due to this perceived peak intensity (pain, like other neural processes, is logarithmic, not linear) may prevent the patient from ever receiving another injection again. Whereas skin localization may be beneficial for some, in others the skin wheel simply amplifies the fear and hypersensitivity of what is to follow. While it would be nice to be able to hypnotize patients or use progressive desensitization, most chronic intractable pain patients with hypersensitivity respond poorly to this, and it is time intensive.
Financing sedation is an issue, but if if inexpensive sedation agents are used and there is not a protracted post injection monitoring period for which there is another charge, then sedation can be useful. As far as safety and pithing the nerve with a sharp needle- using fluoroscopy in a rational manner can prevent this by maintaining the needle far posterior to the nerve. Blunt needles simply cannot penetrate the nerve therefore when used with sedation, are the least likely to cause nerve damage.
Sedation is not for everyone, but should not be withheld because solely on the basis of physician bias, the erroneous concept that the physician can somehow determine the level of pain the patient is experiencing during the injection, or preconceived ideas based on poorly constructed studies.