For myself, I always took "Chi" to be a magical, explanation for that which occurs on an entirely physical level. The one inch punch, throwing chopsticks through whatever, etc. can all be accomplished by anyone with the amount of practice necessary to optimize body mechanics. When I played baseball, I hit the ball maybe 4 out of 10 times. And, of those 4 times, only perhaps once would everything come together perfectly and allow me to hit the sweet spot. To me, a punch thrown with "chi" is the exact same type of thing; it imparts the same sort of feeling as my body and the bat working in perfect unison to hit the ball out of the park. If that makes any sense!
Its just physics and, to me, its a shame that so many people have equated it with magic or spiritual energy or whatever.
edited to add: I do think that the concept of chi may very well have a kind of psychosomatic (probably not the right word given the context) effect for the practitioner. In essence, it could help him, through deep focus and visualization techniques, to make his throw, or a strike, perfectly- effectively using his "mental energy" to complete a move. But, its still a function of physics and, in my opinion, the idea of chi as some kind of magical power results from an imperfect understanding of physics and physiology and not from some esoteric well of mental energy.