There is something awesome about having a board that fits in a backpack, or under your seat on the airplane the way a Penny Board does. What is not cool is that the small size of a Penny Board makes it necessary to ride with an incredibly small stance (feet close together) which generally results in a less visually appealing ride style — not to mention less control, less stability and a reduced ability to recover when you make a mistake.
That short ride stance is generally the reason a lot of people think Penny Boards are lame — short stance makes the default ride style look funny and make Penny Boards less versatile than a Longboard or a Skateboard in almost every instance.
Steep Penny Board Kick Tail = no good for Tricks
Another issue that impacts Penny Boards specific to ride style / versatility is the angle of the Kick Tail — which makes it incredibly difficult to ollie / do tricks. The steep kick angle means the tip of the kick tail won't impact the ground during an ollie meaning that you won't be able to ollie as high — less height means less time to get your feet in position to catch the board and land whatever trick you are working on.
Contrast that with the kick of a street skate deck or even a longboard — where the tail is designed specifically to impact the ground to maximize your ollie / trick abilities and it's pretty clear to see how much impact a seemingly small change in Kick Angle had on Penny Board trick performance.
Further the steep kick makes dropping into a ramp / skate park / bowl much more difficult than it needs to be. Penny Boards could have easily been manufactured with a less steep kick but the mold flow required to fill the board would have meant the molding would be more expensive. To save money on molds Penny Board decided to increase the angle of the kick tail which cripples the ollie / drop in capacity of Penny Boards (and penny knock offs).
Narrow Stance and floppy flex = instability on Hills
The narrow stance enforced by the small Penny Board size (and wasted nose area - more on that below) also impacts stability and control at higher speeds in a huge way — that instability caused by short stance / wheel base is amplified by the decision to use flexible (but low rebound) plastic for Penny Board construction.
While the most obvious impact of dead fish (no rebound) type flex and a short stance is when riding down hills, where the flex and instability are down right dangerous (due to loss of control / speed wobbles) — the flex and instability also come into play when dropping into a bowl / ramp / skate park where you will feel it most in the transition.
Penny Board flex robs much of the power / speed that is generated by pumping out of the transition and can cause the board to get squirly / wobbly as you descend from the lip of the ramp on to the flat.
The material / plastic that was originally selected (and is still used for Penny Boards today) was chosen for it's inexpensive price rather than for it's performance properties. A skateboard with performance skateboard trucks, or even a longboard skateboard hybrid (seen above) would be a MUCH better choice if you think you will be doing any significant amount of Park / Bowl / Ramp skating.
On the other hand if you think you will be doing more cruising / carving / riding on Hills you would generally be better off on a longboard (maybe a Pintail, like above) or a Drop Through longboard / downhill deck like below.
Low Plastic Strength = Shorter Life Span
As mentioned above Penny Board plastic was chosen to be cheap FIRST rather than chosen for it's performance properties. That generally means Penny Boards are not as strong as a composite Longboard — even if they may last longer than a street deck / skateboard (usually this is only because fewer tricks are attempted).
Longboards with performance materials last longer, are more performant and will last through years of abuse and riding.