Atonement has nothing to do with the fact that penance's damage has been nerfed to almost 30% of what it previously was. Atonement was not nerfed. What was nerfed was the DAMAGE that penance does. If you're refering to atonement at all, it's simply because Penance doing 1k, instead of 3k damage, means it's now healing for 1k, instead of 3k when used as a DPS factor and not applied as a healing instead. This is about Penance's DAMAGE nerf. Atonement wasn't touched.
Edited to show Damage for the current leveling people, not the 85s. (Haven't got an 85 priest to check it on.)
Any nerf to Penance's dps is a nerf to Atonement as well since atonement's healing is based on the amount of damage you do.