O'Brien was sentenced for the crime he did commit, however accidentally, and apparently quite according to local law and procedure. Starfleet is supposed to respect local law, up to a limit. Do we see it bombarding Vulcan holy ground for the Vulcan habit of arranging for duels to death for gullible outsiders?
The warning buoys and flagged travel brochures idea is the sound one. Feeling vengeful ought to be beneath Starfleet and the Federation, even if one of theirs gets maimed or killed.
This is basically "Justice" redone: Starfleet has been told what the local laws are, from the practical POV of what not to do; a violation committed essentially through carelessness is a violation nevertheless; and the fact that the local laws were so unremarkable and unexceptional resulted in Starfleet not checking on what sort of punishments were associated with them, and their exceptional severity takes them by surprise.
In "Justice" Picard is quite ready to violate local law. But he hopes his violation will be considered an appeal to the otherwise hard-to-reach Judge, and it indeed is. In "Hard Time", there's no time window for a violation, though, or for any other sort of appeal. But if the local law doesn't cater for those...
Timo Saloniemi