Frankly, I think if they're going to have the penalty system, it should be more severe -- it's too easy to pinball off of cars and walls and still make a clean pass, and while you get point deductions for that... who gives a shit when it leads to winning a race? This reminds me of the PGR games, where wall bumping was common in high-level races, due to how tight the courses were and how little speed you lost when hitting a wall (for a lot of corners, the fastest way to take a turn was to go into a corner a bit too fast and bump off the wall coming out of the turn). RPM penalties are actually not a new concept even to arcade racers -- the Initial D games have them (although there's also a way to negate them, at least in the older versions) and the Ridge Racer games would just drop your RPM and speed on the spot for hitting anything.
BUT
This only works if you can properly assign blame for a given collision. That's what really needs to be fixed -- getting sideswiped off the road by another AI driver and then eating a corner cutting penalty on top of that is just awful. They should make it so that if you were hit off the road by someone else, you shouldn't get a off-road/corner penalty. However, this could lead to some weird play in team races (where you intentionally bump a teammate off the road so they can take a shortcut). Who knows.
