Firstly, damage output is supposed to be a trade for healing- remember the 50/50 argument. Right now Atonement's output is still more like 50/80 damage/healer ratio- that's being generous and including the T14 bonus. That overall total needs to come down. It will come down naturally a little more as people replace their T14 gear, but surely not enough to approach the stated balance goal. Nerfing Atonement's output across the board is really the most mechanically sound way to bring it down the rest of the way. Taking down the damage output and leaving the heal in place would both hurt Disc in every non-raid application and make the 'damage or heal' choice less compelling.
I'm not going to argue that Atonement does good damage. But you need to realize that those numbers are inflated due to the T14 4-piece bonus, Smite spam and ToT allowing you to fit in quite a bit more Penances.
The damage contribution from a 9s Penance alone isn't game breaking enough that its healing contribution needed to be reduced. A Resto Druid with HotW or a Holy Priest using Chastise during down phases should be able to contribute similar amounts of damage.
Nerfing Atonement across the board may be the easiest way, but it doesn't address the fact that the main issue is with the spammability of Smite, not offensive Penance or Holy Fire. A better alternative would be to give Smite the Solace treatment, removing it from Atonement and just reduce the amount it heals for further.
Also, there's no real 'damage or heal' choice for Disc Priests. When Atonement is our only raid wide spot heal, it's something that we'll revert to when there's light damage (or use on CD like offensive Penance). The lack of alternatives removes the element of choice.
Secondly, they have already stated plans to change how PoH works. I don't think that's too far off and will dramatically affect the 'damage or heal' decision-making process.
I'm pretty confident we won't be seeing any changes to PoH this expac, as least none that are mechanical in nature.