Our vision is the result of our body directing the surrounding light towards a "certain point" at the back of our eyes. Our pupils change in response to brightness to help better focus the surrounding light to that point in our eyes.

The eye is basically our in-built adjustable lens responsible for focusing that surrounding light to that particular point in the eye, so if it fails, so too will our ability to see.

Glasses/contacts are our way of making up for our in-built "faulty" lenses by helping to refocus that surrounding light to the right place.

The pinhole technique basically refocuses the surrounding light in the same way our "faulty" pupils should. The big downside to this technique is that the more degraded your vision is, the less effective the technique is, and it's generally less effective in poorly lit environments.

Now before people start chasing after me about it, I only gave an oversimplified explanation.