For sure, Joe got punished, and Penn State REALLY got punished, for Joe not retiring when he should have. That stupid lifetime wins contest with Bobby Bowden meant both of them stayed too long. In Bowden's case, it meant the cupboard was bare when he finally retired and Fla State football hasn't been the same since.
In Paterno's case it meant this scandal exploded 100 times worse than it would have if Paterno had been golfing in Bermuda. You could probably argue that Joe's inability to retire cost PSU a billion dollars. And it certainly cost Paterno his reputation.
That is a classic Greek plotline -- Joe wants the total wins record because he's so concerned about his legacy -- so he destroys his legacy.
I think your "classic Greek plot line" reference is right on target. On so many levels...and not just for Joe...this story is a tragedy in the classic sense of the word.
But Joe in particular is a tragic figure. Good man, great coach, legendary sports figure ultimately done in by the most common...and deadly...character flaw in human nature: pride.
Everything he stood for...worked for...accomplished...smothered almost overnight by an unimaginable scandal magnified a thousand times by a media mob which created an instant narrative, NCAA jackals who sought to outdo one another in their hypocritical virtue-signaling, and a cowardly Penn State board that promptly surrendered to the demands of the mob.
I mean, the whole thing makes me sick to this day. That said, however, the hard fact is that Joe played a role in his own downfall. Another hard fact is that the story is not black or white...but rather gray. Most tragedies are. That's why they're tragedies.
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