Penal substitution is a development of the thinking of the medieval church leader Anselm. He lived in a feudal society, and his thinking reflected that. For Anselm, sin represented an offense against the honour of God. A dishonoured monarch demanded satisfaction. The sacrifice of Jesus was the means by which God's honour is restored and forgiveness is made possible. The Reformers (Calvin, Luther and all that crowd) took Anselm's thinking a stage further. In their scheme of things, sin is not an affront against God's honour but rather a debt which has to be paid. The punishment due to the crime must done before restoration can be offered. God in Christ pays the penalty himself and makes atonement possible. That's it, I think, in a (very small) nutshell.