Discipline Van Nostrand style

Okay, so we might be a little strict with Jack. Not in a bad way (I hope) but just generally expecting certain things out of him, and trying to be consistent about them. Things he has been told he can't do include but are not limited to the following:

-eat fruit snacks for every meal
-pull Tug around by the tail
-sleep with sharp objects
-go potty in the bathtub
-play with Daddy's saw

Reasonable enough. And he needs to pick up his toys when he's finished with them. Generally this refers to blocks and stuff, and he's great about putting them away when we're cleaning up. But recently we found something he just plain refuses to do. He has taken a liking to construction paper, and to little-kid scissors, and to markers - getting them out and doing "art." He spreads them all out on the floor and proceeds to cut/rip the paper into tiny shreds, color the tiny shreds (and his hands, shirt, floor, etc.) and then arrange them in some sort of meaningful (to him) pattern that takes up most of our living room. We're fine with all of this, obviously.

The stumbling block comes when we ask him to clean up. We offer to help, which doesn't work. We have told him about taking care of our house and our things and we have perfected the explanation that he is choosing to do this and that he could have been done already.
He's watched Tugboat fall down as she slips on a pair of plastic scissors left on the ground and Kitty gag as she tries to choke down a piece of paper. He really doesn't seem to care.

Okay, as I'm writing this I realize we sound so harsh! We're really not, I promise!

Anyway, the other night we took the stack of construction paper away from him and told him that he could get it back when he picked up the ones he was finished playing with. He started wailing that he wanted Santa Claus, or for us to take him to daycare. Now he seems better but when I'm reading him a story where a kid is being naughty, he asks me if they got their paper taken away. I have to say "maybe" even though I don't know anyone else who was mean enough to deprive their kids of construction paper. He'll thank us when he's older and disciplined.

Right????