From sheldonbrown.com:

"Pinch Cuts result from hitting stones, curbs, or sharp edges of holes in the road surface. When the tire hits a sharp edge hard enough, it compresses so that it bottoms out. The inner tube can get pinched between the rock and the rim. Pinch cuts usually put two small holes in the tube. This type of damage is sometimes called a "snake bite" because the two holes look like the wound made by the fangs of a snake.

Pinch cuts sometimes ruin tires as well as tubes, but usually the tire will not be damaged.

The impact that causes a pinch cut can also make a dent or "blip" in your rim."

Basically, the pneumatic pressure in your tires isn't enough to keep the rim from hitting the ground when you hit a pothole or something.

I've never had a problem with taking the pressure to 10-20 psi above rated pressure, but I've always used brand new tires, as well. If you're on ten year old dry-rotted rubber, you may be SOL.