I didn't even watch the Tahs v Rebels match. But I saw the Tahs v Reds. While there were good moments, to be honest I'm not even sure if there is improvement over the first round match. So while I don't agree that Penney should have been dropped, I'm not surprised that he was. There just wasn't the improvement we should have been seeing from the squad by this point.
To my understanding, the squad isn't as much a result of Penney's choices as it should be. It's more Tahs management that let people go, and Penney has just been dealing with the players left to him.
Reds went through a few years where they were more than willing to drop big name stars for any slight reason. The management stuck with the coach (Thorne) as they relied more on young players and getting them up to speed. Now look at the Reds, top of the table.
Waratahs looked like they were trying the same routine. Simply didn't offer big names a new contract, even a token contract to those who would have taken it. Dropped the squad down to juniors some of whom weren't ready to step up but one day will be and some who may never be good enough for this level. But Tahs management didn't have the balls to follow through the way Reds management did. To stick with the multi-year process. For that greater reward down the line.
What they could have had was finally a working development regime where young players regularly get brought up in to the team and developed. Flaws fixed. Introduced at a good rate to make them shine. Now, it's a sure bet Waratahs are going to go back to tried & true old methods of throwing money at weak positions, having a high $$ squad that consistently underperforms. And young players who are better off going elsewhere if they want to become Wallabies rather than just burnt out. At least for their initial few years until they make names for themselves.
These last few years at Waratahs, the big changes and decisions, for what? Nothing. I can guarantee the board will go straight back to the same old same old.