Most of the damage from a gunshot wound doesn't come from the hole, but rather from the cavitation the flesh is subject to as the bullet passes through it. The shock wave from a physical impact of that magnitude absolutely rends flesh.
Most urban/non-military gunshot injuries are from pistols, which have a fairly negligible temporary cavity since they're relatively low velocity (order of 1000fps, vs. 2500-3000fps for a rifle round). Plus, they're often expanding ammunition (hollowpoints, etc.) which do more direct tissue damage.
Military rifles, firing FMJ ammunition, do have a huge temporary/cavitation trauma vs. direct trauma (unless they hit bone).
See my comment elsewhere in this thread; Martin Fackler and his followers believe temporary cavitation trauma is "at best a secondary mechanism, if not irrelevant."
Although I have a personal theory about why FMJ battle rifle (e.g. 7.62 NATO/.308) torso wounds tend to be fatal, at least in the field: there larger temporary trauma diameter stands a good chance of shocking the spine and disabling long enough for person to bleed out unless someone else quickly comes to their aid.
This is highly debatable, and as noted almost entirely irrelevant for urban crime gunshots, where muzzle velocities don't go much above 1,000 fps.
If you follow the Fackler school of "terminal ballistics" as I do, even for rifle velocity wounds this is "at best a secondary mechanism, if not irrelevant." (http://en.wikipedia.org/wiki/Martin_Fackler). It's the "permanent wound cavity" or ""permanent crush cavity" that does the real damage, soft tissue appears to be awfully good at getting pushed to the side and springing back.
