There is nothing wrong with Penny Boards — they are a short, cheap board BUT Penny Boards are not a good board choice for most people in most riding scenarios due to their small size. Penny Boards aren't bad, they just are not as versatile as a longboard or a skateboard for transportation.
Penny Boards are good for riding in crowded areas on flat ground (hills can be dangerous) and are small enough to fit in your backpack, which can be useful. The small size can cause major problems and is a huge disadvantage for most riders, most of the time.
Why do people say Penny Boards are Bad?
The first reason people think Penny Boards are bad is because they are not good choices for larger riders — that immediately makes them bad to a lot of larger people. On top of that what Penny Boards are best at (easy carry board ideal for airports etc) is incredibly specific when compared to the versatility of longboards or skateboards. That can feel limiting to most riders who chose a Penny even though Penny Boards are cheaper / less expensive than longboards like you see in the video below (for example).
The other big reason people think Penny Boards are bad is because the shape and design of Penny Boards focused primarily on cost savings (make it cheap), while sacrificing rider comfort and stability at speed.
What's bad about Penny Board shapes?
The design of Penny Board shapes — both the 22 inch original shape and the slightly longer Penny Board Nickle — lose a lot of wasted space in the nose of the board (in front of the forward most truck) that is not useful to stand on. The space between the Penny Board trucks gives riders the most leverage and control — but that space is shorter than it needs to be so that Penny Board saves money and comes in cheaper.
For small boards (22 inches for a Penny Board) ANY wasted space is a critical loss for a rider since it means the rider's feet need to be closer together — that results in less stability, control and comfort when pushing.
Since reducing the size of the Penny Board nose would be a relatively simple solution to improve performance a lot fo people say Penny Boards are bad since that change could have been made to begin with.
Less control means more wipe out's and more injures that could have been avoided, that also leaves more people thinking Penny Boards are bad.
Why do Penny Board shapes waste so much space in the front of the board?
As mentioned above Penny Boards were designed with that wasted nose space specifically because the distance (wheel base) between the front truck (axel) and back truck (axel) also dictates how much stiffness is required in order to support the rider. Wider wheel bases (distance between axels) always require stronger materials which are more expensive, so to achieve a cheaper price Penny Boards cut costs by reducing the space between the front truck and the back truck by adding a nose which is not useful and is really an aesthetic feature to improve the looks of the board only.
That shorter wheelbase (due to the un-used nose space) allows Penny Boards to be made of thinner, cheaper plastic (rather than Canadian Maple, or even better stronger composite) — it's also the one and only reason Penny Boards are cheaper (under $100) than some better performing mini longboards and cruisers.
The downside of the combination of poor design choices and a super small shape is that a Penny Boards ended up really hard to use for your average size rider. When you watch larger size riders (or even average size!) ride a Penny Board the small wheelbase is also the reason their stance generally looks awkward.
Contrast that Penny Board shape and stance with something like a Derringer 33 mini-Carving Longboard — where the shape is designed to specifically take into account the fact that there is not much space to work with. The space between the front and back truck is maxed out (leaving no nose) to give the widest stance for more control and stability.
Shortboard skateboards / street decks also have more effective standing platform than a Penny Board — though less than a longboard. The way a street deck is designed also prioritizes riding performance and standing platform over cost savings in ways a Penny Board does not.
Standing platform has such a big impact on the performance of a skateboard (or longboard) that there are now also hybrid longboard skateboards designed for street skating AND riding hills — those boards (like the Arbiter DK below) take advantage of larger standing platforms but bring street skate style shapes to make tricks easy.
With millions of people buying Penny Boards LOTS of people ended up riding decks that are bad (not well suited) for their height and weight — while also being not well suited to their neighborhoods or commuting needs — the result is a huge percentage of riders feel that Penny Boards are just not good. The fact that Penny Boards are cheap means that LOTS of people bought a Penny as a beginner even though it is not a good board for average sized riders to learn on.
Penny Boards are not Bad.
As mentioned up at the top — Penny Boards are not inherently bad. There is nothing that says a plastic board will perform poorly. In fact Fiberglas composite and Carbon Fiber (two of the highest end / highest performance materials) are both majority made of various types of plastic.
It's the TYPE of plastic Penny Boards are made out of that causes the problem since it was selected to be in-expensive — rather than being chosen for it's performance characteristics. The Apex 40 Longboard in the video below on the other hand is built strong using composite carbon fiber and performance plastics.
If you spend a lot of time on planes, rushing through airports, that is for sure one place Penny Boards (and knock of Pennys) out shine the alternatives. It's easier to pick up, put down, and carry a smaller board through crowded areas (where long distance comfort isn't important).
The issue main with Penny Boards relates specifically to the design choices that cause Pennys to be a bad choice for most serious riders, in most common riding scenarios. If you don't travel / fly a ton (or even if you do) — you will probably have more fun on a skateboard (if you are into the park scene) or a longboard if you are into dancing, freestyle tricks, or riding hills.
On that note — regardless of what type of board you choose (skateboard vs longboard etc) make sure you take some trips with your friends. Road trip, plane, whatever — it's easy to make memories and always hard to come home.