I think the new PENN ED is for students where PENN is their #1 choice, by far. They have to take their chances with RD if they get rejected. Perhaps PENN is trying to rationalize its ED admission % (which I understand is very high) by making sure that only students that truly want PENN apply ED, and not students who are trying to use the ED lottery ticket, but really want to go somewhere else (like MIT) if they get accepted.
I agree, this policy stinks for students.