[BoomerSooner]

The loss of down penalty is in reference to the fact that most penalties against the offense allow for the down to be replayed. In this case the ablity to replay the down in question is lost due to the loss of down penalty. If we were apply your suggestion and eliminate 1st down in your play the following conclusion would also be required: on A's 3rd and 10 from the A20 with an illegal forward pass at A22 would result in B's ball at the A17.

It's similar to a play where A has 3rd and 2 at A28, A2 runs the ball to the 50. During the run A56 commited a holding penalty at the A41. The penalty would be 10 yards from the spot resulting in the ball being place at the A31. While the penalty would normally include a replay of the down, awarding a new seires of downs overrules the replay of down portion of the enforcement (as it does in the illegal forward pass situation).