It just seems like lethality is a punishment if you're ahead...

The issue with old armor pen was that it was more gold efficient than HP and armor in early stages.

This meant that the simple act of buying armor pen put you ahead of the enemy. No outplay needed. It then transitioned into getting hard outscaled as the game went on.

Basically it snowballed you by existing but then became inefficient later on, and thus was a wierd stat to buy. I have serious doubts that Lethality is actually worthless when you are ahead, since it scales so well compared to old armor pen.

That is kinda what it is now in a sense.

It is a bit of flat pen + more pen based on target level, meaning it scales ROUGHLY on pace (in a balanced sense) with a squishy targets base armor.

No, it was to change the nature of armor pen to be more balanced. Lethality actually scales well compared to armor pen. Old pen was more gold efficient than health or armor until a certain point.

What that meant was that buying early pen 1100 gold of arpen was better than buying 1100 gold of HP and Armor, and you snowballed simply by building the stat and having more value. To be fair, once a large quantity of armor is built up, the effect diminishes, but the damage will already have been done.

What lethality does is trade an overbearing earlygame (that was obtained by simply clicking in the store) and give you some better scaling on the stat.

I used to run Pen reds and Quints on (old) Rengar. The damage output was disgusting. People could jump me when I had 2 stacks and 1/3 hp and I would be able to turn and kill them from full without even having created a lead in that game. I just simply had BETTER stats than them at level 1 and for the rest of the game because I had armor pen.

Flat pen makes it so that assassins, whose primary targets are squishy carries, doesn't do that much damage against tanks.