Penance was just a bad idea refracted into infinity. Starting from the fact that the explosion was a rather hackneyed plot device anyway, Speedball putting on a faceless black-and-iron-costume that stabs him 612 times with every movement in order to punish him for his sins is so over the top that it reads like a 13-year-old's tragic antihero fanfic. It was also no accident that Speedball was a happy-go-lucky jokester up to this point, and comic fans are smart enough to realize when a writer's trying to manipulate them into thinking "THIS IS SO DARK THE CONSEQUENCES WILL NEVER BE THE SAME" - so it all came off as very disingenuous.
Personally, I think the later retcon that he was just wearing it for motivation until he caught up with Nitro and put the suit on HIM, and the implication in New Warriors that he's still working through his guilt beneath the surface, go a long way towards redeeming the concept. But at the time that comic was made, the idea was just pure crap and deserved to be mocked.