Lets go through the many ways in which Israel is being punished for this:

* Twenty five agents have had their identities compromised. Bear in mind that agents you can send into a foreign country to participate in an assassination do not grow on trees, even if you're Israel. This has not just impaired Mossad's supply of agents, it is also a blow to the morale of the organisation.

* These twenty five are at a real risk of reprisals in the years to come. If a video of one of them turns up with a bag over their head this will do further damage to Israel's prestige and Mossad's morale.

* Worse still, the identities of foreign nationals have been stolen. This has angered nations that actually matter, ie prosperous Western nations. Israel is not in a strong geopolitical position, it relies on the goodwill of it's allies.

* The goal of the exercise, to eliminate a threat and strike fear into Israel's opponents, has been poorly accomplished. It's caused Israel no end of diplomatic troubles and made it's victim a martyr. Actually eliminating an arms dealer isn't much cause for celebration anyway as there's an almost endless supply of them. You'll run out of wetwork teams long before they run out of arms dealers.

* Finally, footage of Israel's incompetence have been displayed on TVs all around the world. You don't strike fear into the hearts of your enemies by cocking up repeatedly on TV.

Essentially, this was a political, not a military, operation, and it's failure has punished Israel politically.