When you see someone else who's in physical pain or emotional pain, it makes you feel uncomfortable too. In that case, you can say that the situation "hurts to watch".

For example, imagine that you went to a comedy show but one of the comedians wasn't funny at all. It made the audience feel uncomfortable. You can describe the situation like this:

This one comedian was so bad, it hurt to watch.

When something painful is happening live in front of you, you can say:

This hurts to watch!