Remember that the 401k/IRA money was not taxed when it was put in. So to me it’s reasonable to require that it be taxed at some point.
We can argue over what the rates of “fair” taxation should be, but making it subject to some tax is only proper in my view.
I’ve no problem with the $$ being taxed as ordinary income when it is distributed. My problem is with the 50% penalty, regardless of one’s income, if one doesn’t take the $$ out when the IRS says to, as opposed to letting it continue to grow until one needs it. At no time would my relative have been even remotely close to a 50% federal income tax (+ SS tax) rate.