I think a few such holes on a course are great. I can see the logic of having a ball marginally mis-hit being better off than a ball being fairly mis-hit. However, I think a major part of the fun of the game (for me at least) is the challenge that comes with knowing that if a shot misses even by the slimmest of margins, it's going to find trouble.
One such hole is the 2nd at Royal Dornoch. The first time I played it, I hit my tee ball a bit chunky, but straight, and I ended up ten yards in front of the green for a fairly easy up-and-down. In the afternoon I hit a solid shot that faded a bit, hit the green, and barely trickled off the right side, where it rolled and rolled, and stopped at a place where there was no way I was going to make par. Now, I hit the second shot better than the first, but the first ended in a better spot.
Same with the third at The Golf Club. I could miss the green right by a foot, or miss left by ten yards, and I'll take being left all day long, due to the right-to-left slope. I think that is good architecture; nothing wrong with knowing that if you try a certain shot, and miss in the wrong spot by even a foot, you're in a spot of trouble. So to answer Pat's question, I think incremental punishment is okay at times, but in the end it may lack variety and interest.