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Sunny,
The penalty is the ball is dead, the batter is out (because of the catch) and the remaining runners must return to the base occupied at the time of the pitch.
Tom,
If this was not a rule, the catch could be ruled an out on the batter and then the runners could stay on the bases. However, when the fielder intentionally drops it, it can confuse a runner and cause them to immediately think, "Was it a catch? Was it not? Should I run or should I stay?"
My thought is that it is kind of like a fake tag being obstruction. The only difference is that the fielders are on their bases and the rule is just to kill the ball so as to kill the confusion caused by the fielders bad acting.
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Dan
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