Believed to come from the English punch and Judy
show that was popular at all seaside resorts. The character Punch was a proud fellow who would never admit to being wrong. This puppet character was in fact a bully with total disrespect for the law and family values. He often threw the baby out of the pram. See any listing for punch & Judy
or Punch & Judy show
The expression Proud as Punch was originally a derogatory term but slowly was reduced to expressing how someone was feeling.