In fact, you are punished for disconnection. You're punished exactly the same way you'd been in PPS in the long run, provided that you disconnect asynchronously, i.e. randomly.
At Slush's, you can either lose, when you disconnect near the round end, or you can gain, when you disconnect at some other time. In the latter case, your payout for the round won't be decreased due to the disconnection, although you would deserve some decrease. And as the time constant c is hopefully still 300 seconds and an average round is several times longer, it's greater chance for you to gain a bit than to lose substantial part of the reward.
Anyway, in the long run that should even out, as is the popular phrase in this thread for some time already... :-)
(...)
but I have a hard time feeling I'm being punished for my downtime when ... well ... I'm down.
In the long run, you're "punished" just to the extent you're down.
When you won't come to your work, you won't be paid.
Or would you like something like paid holidays?
I swear this topic comes up every now and then because... well like you said, it sucks to be punished (e.g. kicked when you're down).
I want to elaborate a bit and you guys can correct me if I'm wrong. The key to all this is really variance. The way scoring is done on Slush's pool is subject to variance and it's much more evident on slower miners and less so (but still present) on faster/more powerful ones. So what does variance have to do with being punished???... a lot.
Take for example if you're disconnected in the beginning of one of those crazy 7 hour rounds and 1 hour later you manage to fix your router, USB hub, whatever... At the end of that round you're actually not penalized that hard because what's 1 hour worth of shares compared to 6 hours of shares (and plus your score is isn't hit badly because you've been continuously mining for the last 6 hours of the round).
Now take the counter example. You disconnect for 1 hour (same amount of time as before) but instead 4 rounds go by (a 5 min, 30 min, 15 min, and 10 min). You just missed out on 4 different payouts. Remember, on Slush you're paid based on the rate you contribute, so you usually get the same pay for large rounds as you do for short ones (again with some variance).
Contrast the two examples and what you get is HUGE variance in punishment. You can get punished a little bit or a lot. While it's true that it averages out in the long run, the "long run" is a really really long time. For someone who isn't down that often... say only once a month at most... you catch one bad break and you'll need at least 2, 3, or 4 lucky breaks to "even out". I figure that most people don't catch as many lucky breaks as they do bad lucks as they haven't really been mining all that long (I speak from experience as both of the above scenarios have happened to me, plus I'm a low hash rate miner and I haven't mined that long). You really can't compare this to something like PPS because they're two different scoring mechanism. It's like comparing apples and oranges. PPS just doesn't punish you the way Slush's scoring does.
So.... Why stay on Slush? The reason is the same. While you get heavily punished for disconnections during short rounds, you can also get highly rewarded in short rounds (if you're always connected and mining). As a slower/weaker hashing miner you get paid the same in short rounds as you do in long rounds (again with a little variance) and with lots of short rounds, you get paid more on Slush than if you're being paid PPS in the same period (partially due to the high pool fees associated with PPS pools).
Really all that's left now if for someone to do some really hard number crunching. Basically someone needs to look at the current difficulty, the percentage of Slush's pool hashing power as compared to the rest of the pools (and remaining hashing power not attributed to a pool) and generate a standard deviation curve for round duration. Using the round duration curve against someone's hashing power, one can calculate their payout probability curve (per a given duration, say 24hours). You can take that curve and mark that against what other pool's PPS rates are and then determine if the probability of earning a greater amount on Slush's pool vs other pool's PPS rate is statistically worth staying on Slush.