I have followed the whole drama closely, from the first post on FSU that used translate.google.com to find discrepant birthdate records of athletes on the Chinese federation website (which was indeed before the AP article, which pointed to the same document).
I have been following Chinese skating forums and watching Chinese figure skating competitions for years, and my personal perspective is that age-falsification among Chinese figure skating athletes follows a certain pattern: young skaters from provincial teams (usually pre-teen) burst onto the national scene showing some precocious talent, the media rave over them and exclaim how young and promising they are. They get noticed by the federation at the national level, and suddenly their ages increase just before they get sent to their first international competition. (I have only seen this with female skaters; it doesn't necessarily mean that none of the male skaters' ages are deliberately falsified, just that they may have happened earlier in their careers before they got anyone's attention) At the same time they get noticed by the national team, they also have to move far away from wherever they are from, hundreds/thousands miles away from their parents, and sent to live in national team controlled dorms. This is especially tough for the young girls, who don't even get to go home for Chinese new year, which is the biggest holiday (it's like Thanksgiving, Christmas, and Easter combined) and nationally decreed to be a holiday for everyone (so either the federation is violating national law to make them train through that holiday or the laws make a special exception for young athletes!). In any case, it is at a time when these young children (and often only children) are removed from parents' sphere of influence and protection that the age change takes place. And from then on, the coaches and the team officials, with vested interest in their succeeding in international competitions, become also the parental figures in their lives. Does anyone remember that Tong said in an interview after he revealed his romantic relationship with Pang (from an article I translated) that he didn't know whether to pursue her or not until a top-dog team official gave him the stamp of approval, saying that later in life Pang will be the only one who will be able to fully share/understand the happiest and saddest moments of his skating life, that he found the courage/determination to tell her his feelings, and moreover that he saw that team official as the father figure in his life? Tong is a grown man in his 30's. If he is under such strong personal influence of the team officials, just imagine what the little 10-, 11-, 12-year girls' mental world is like.
One little story: when little 13-yr-old Zijun Li was first entered into Asian Winter Games over Chinese New Year, she said she wished she could see her parents instead, but hoped all the hard work was worth it and will eventually pay off. But then the host nation discovered she was underage (age rules are the same as for GP's), she was left in Beijing in the empty training center, with her coach and training mates gone, and still not allowed to go home for Chinese New Year. To me, it just shows that the federation and team officials don't care about athletes' welfare at all. She was already really bummed that all that hard training was for nought, at least they could've let her go home to see her family.
I really believe that age falsification is happening with the knowledge, permission, and even encouragement of high-level skating federation officials -- they get promotions and financial bonuses if their athletes perform well at major competitions, and if the cheating is discovered, the athletes get to take all the blame. It's the Chinese version of the "win I gain, lose you pay" U.S. financial system -- the big investment bank bosses get the huge bonuses if their reckless gambles pay off, and the American taxpayers pay for the losses if the gambles don't pay off. So the big bosses in both instances have all the power to make all the decisions, saddle someone else with all the problems when things go awry, and therefore every incentive to cheat and be reckless.
So I think some penalty is indeed necessary in the case of the current age falsification scandal. But I think it should firstly be done in a fair way that would be the same punishment meted out to another country found out with the same conduct, and secondly should be done in a way that should not exacerbate the "win I gain, lose athletes pay" situation in Chinese figure skating. And taking away athletes' previously won medals, banning all athletes from competitions for a year or two, while leaving the administration officials alone, is precisely the wrong thing to do! They could always just blame the athletes for all the age discrepancies and sit pretty in their bureaucratic perches and wait for the next young crop of athletes to turn up for them to mold and exploit as they see fit, or maybe they have already made career and personal advancements based on the success of underage athletes, and are now out of the skating world altogether.
Just as it would seem totally unfair to try to correct the U.S. financial system by punishing taxpayers/voters severely for the poor investment strategies of Fannie Mae/Fred Mac/Goldman Sachs -- after all, taxpayers are also voters who sort of control the white house and capitol hill, who legislate and execute regulations that ultimately oversee the financial entities, so you could say taxpayers/voters have to experience the punishment in order clean up the financial system. And in a way, this is slowly happening, with the grass root supported passage of the Obama financial regulation bill (the biggest achievement of his administration so far, IMHO), which, among other things, stipulates that big bosses cannot reap a large chunk of their bonuses until years later, when it is proven that their investment strategy really pays off in the long term instead of reaping short-term gain and causing long-term problems to the financial entity. So what will perhaps improve the Chinese skating federation is grass root supported reform of the administration that makes it more transparent, and the officials responsible for problems (like the discovery of age falsification) as well as the gains (competitive success). And obviously that will take time. Look how many years it took to get this financial regulation bill passed, and how many more it will take to get it actually implemented, and we live in a democracy where the people actually have a voice. In China, for the athletes, their families, and their fans to finally garner enough support to change the political culture due to direct punishment of athletes, it will definitely not take place very quickly, certainly too late to save the skating career of some athletes.
This is why I think that the belief that meting out severe punishments to the athletes (by banning them from competition for years, especially if their age isn't even in question) is both unfair to them, and also ineffective -- it is misguided to think that within that authoritarian culture that athletes' suffering will quickly, if ever, lead to a change in the political culture.