Her punishment in the grand scheme of things is not excessive at all. I think Cozy Glow is right where she needs to be (in a max-security prison). Also, if they didn’t send her there where the hell else would they send her? It already seems like she has a plan to break out of Tartarus, and if Tartarus can’t hold her I doubt any other prison in Equestria could. Just my opinion though.
 
EDIT: I also have a feeling that reforming her is completely off the table now. Someone below said it best, Cozy Glow was a STAR-STUDENT at Twilight’s Friendship School which means that reforming her and attempting to teach her about friendship would make zero sense. Cozy Glow apparently knew enough about friendship to the point where she not only excelled in the classes, she also became Twilight’s assistant at the School.