The problem is that Google took this in such and embrace-and-extend direction that seems to benefit them and give them a lot more power than they had before. And I already think Google is way too powerful.
Their solution annoys me and creeps me out more than the problem did. By a large factor. I don't like them being so deeply involved at this kind of level. If they are going to do something, I can't think of something I would like for them to do other than just tuning the penalty.
A small penalty devalues gaming the way google measure the speed.
I had to worsen JPEG image quality to get good score for a website in Google's PageSpeed tools [1] because our management believes it affects search rankings.
That tool is awful. I would never follow Google's recommendations on my own site. The compressed versions of images it suggests one should use have visible artifacts.
AMP does the same thing. Many sites don't have resources to convert their content to AMP pages and they will get worse positions in search results.
There already is a penalty for slow-loading pages, but you make a good point that the penalty could be increased to the point where publishers would be forced to adapt accordingly. However, outside of the news ecosystem, that would end up penalizing a much larger base of content creators who don't have the means and infrastructure to handle this.
To say that "well users who have good content should also get their shit together" rings a bit hollow, especially on HN, where technical/deep/interesting articles get upvoted to the front page only to crash from the traffic. If authors of those articles/sites can't do it, then it's a problem for most folks.