Their flamer upgrade make them pretty useful in urban maps.
For the rest, I dunno I find them pretty useless too. 'Anti-infantry' - sure.
So does the CE flamer.
Penals are tier restricted unit who does the same job as engineer.
Penals should get 100% far accuracy increase to double their far DPS for starter, if that won't be enough, I'd go for vet change, even if it meant cost increase.
But far dps being 2x of what its now should be enough-simple change, hard to fuck up, even relic could do it.