I've been looking at Penance, and I really can't wait until Bliz gets this spell hammered down. It's very obviously a soggy talent because all the top-tier damage/healing abilities require the most work to balance (look at chaos bolt, living bomb, typhoon, thunder bolt and how much they're all changing around in beta). As Blizz finishes it, I'm thinking it will begin to look more like a possibility for a dps holy build. Here are some thoughts:
a) If they keep the talent in, they're not going to scrap the damage part as some people have suggested. holy is a healing tree, Shadow is a damage tree, and Disc is supposed to be a fuzzy utility hybrid between the two. Disc has enough talents that specifically support healing in the upper reaches (for example rapture, which I'm not happy with, considering my holy DPS builds ), they won't make penance healing-only.
b) The damage portion of the spell will be scaled and in-line with the healing-portion of the spell, hopefully without sacrificing too much mana efficiency. If we can add a spell like this to a holy fire/smite/SWP rotation, then we'll be able to lay on the damage. Especially with PI (improved cooldown of PI and Penance with Aaspiration) we'll be able to pump out some high burst DPS.