Pretty much everything. Your analogies for the most part are ill-thought out nonsense. This isn't "akin to why is neighbor 20 blocks away who didn't even know the guy being punished with firebombing when a father 10 years ago did the crime." What the hell does that even mean?
If you're looking for an analogy, try the sanctions the world placed on Iraq for many many years for sponsoring terrorism. Medicine and food supplies into the country were cut for most people. People that had no decision power with how Iraq sponsored terrorism suffered for the institution's crimes. A sad side-effect, but necessary to change the institution itself. Penn State the institution is being sanctioned here. If you're part of that institution, you're going to feel the effects of it. And I'm sure the hope is that all the suffering that is about to occur will positively change the culture of not just how Penn State handles their sports programs, but how the entire institution monitors their own sports programs and puts the fear of god into every other school to not behave similarly. This was an institutional failure. It's beside the point that Joe is dead, Jerry is in jail, and the others are gone.
Except no one was forcing Iraq to pay any fines or anything, they were just cut off.
If people really want to make a difference, mail a congressman to support the death penalty for habitual child predators so to support more punishment for people like Sandusky.
Have Paterno removed from all NCAA wins record books and accomplishments vacated, along with Penn State memorabilia of him.
Put away the former AD and President for a long time.
Don't fine, but force Penn State to work as a non profit athletic department, with the proceeds going into a general fund redirected into establishing or upgrading schools on the University for students who would work in fields of law enforcement or social services, along with child protective law.
Things can be done, but the suggested penalties from the NCAA do nothing to anyone involved, probably save fans some money they now won't spend watching a destroyed team, and fine the athletic department money that will just come from the school's general fund and out of students pockets.