So it was not so much a punishment but an effort to level the playing field, no?
There are two sides of this and I realize there always will be. IMO, there was never any preferential treatment given to EMDs... the better results happened naturally because of the fact it was an EMD.
For instance, you have kw1kw2 and your site content is about kw1kw2. Maybe even your site 'brand' is kw1kw2 which is more than likely. Well guess what... when people link to the site the anchor text they will probably use is going to be kw1kw2 - this just happens naturally. Nobody is forcing people to use that anchor text people just tend to use the site name when linking.
EMDs were always 'the' domain to have because they directly tied your site to its exact niche or content. Many natural things happened because of this including the anchor links I mentioned above. All things Google loved. It has also been a spec of the www since its creation - use a domain that directly relates to the content of it. It also made sense - apparently it made sense to the creators of the www spec as well.
Now, we have an EMD algo added. It pretty much wiped out all EMDs no matter what... how good, how old, how well known, anything. I think the factors in play have to do with many things, but it is a much more strict algo then what a non-emd has. So when you say level the playing field this is not what happened... basically penalizing and profiling of emds is what happened so they cannot be used in a normal manner is.
I think all factors come into play... if the keywords are in your titles, in your page content, how many incoming links use the kws, etc - all things a non-emd would want... an emd cannot use in normal fashion now.
I like to compare domains to real estate as essentially they are. Well EMDs were always prime real estate and Google has essentially completely erased their market overnight with this update. In a few years you will have websites with absolutely no words in them - all completely made up which causes confusion on the users part, but guess what that confusion will lead to more searching and viewing of sites so they can find out what it IS about.
If you have a bunch of domains in front of anyone - widgets, (some made up brand), (some made up brand), etc and ask someone what they think is on the site and where they would go if they needed widgets which do you think they would go to? They all have widgets, but only one directly tells the user without any additional searching, research, or viewing.