Not having ever lived before the current situation, the only things I can say are speculative.
But, perhaps it is a witness to the quality of penance done before the change that so few do it now. If Catholics were truly getting something spiritually beneficial, they would have kept doing it, required or not.
And penance without any intent of actually doing penance, just following rules, is useless. Its like they say about fasting. Fasting without prayer is just dieting. At that point it does not help us.
So perhaps getting rid of it was not the answer, proper catechesis was, or in my opinion, the combination of the two. Make people aware of how to properly do penance and the benefits and reasons for it, but also do not require them to do it. People do things better when they are not forced to do it.
So in conclusion, is it sad that nobody does it any more? yes. But that does not mean that it should be made mandatory again