"Following presentation of the Northwoods plan, Kennedy removed Lemnitzer as Chairman of the Joint Chiefs of Staff, although he became Supreme Allied Commander of NATO in January 1963"
Such a brutal punishment, indeed. A guy makes a plan to kill citizens and he's just moved to another office to continue earn money extracted from these citizens.
It was not a punishment. The guy was getting free goodies from his powerful position somewhere in the government. He proposed to kill people. He got another position with free goodies somewhere in the government.