In previous editions of D&D an elf might get (for example) +2 DEX, -2 CON. That's essentially as compared to a human who gets no modifiers. Alternatively, you could say that the human gets +2 CON and -2 DEX, and the elf gets no modifiers. Just depends what you arbitrarily decide is your base-line.
Well, except there's another mechanical difference (in addition to what people have pointed out). Let's take two people: one elf, and one human. Each has straight 10s for stats, save their ability modifiers.
Example 1: Human with 10 Dex / 10 Con, Elf with 12 Dex / 8 Con. They both need to make a relatively easy DC 10 Dex and Con check, and aren't rushed, in combat, etc. Both can take a 10, but only the human will succeed on both (getting a 10 on each), while the elf will fail the Con check (since he gets a 9).
Example 2: Human with 8 Dex / 12 Con, Elf with 10 Dex / 10 Con. They both need to make a relatively easy DC 10 Dex and Con check, and aren't rushed, in combat, etc. Both can take a 10, but only the elf will succeed on both (getting a 10 on each), while the human will fail the Dex check (since he gets a 9).
Which leads us to the rest of your post:
But let's take Next as an example. Humans get +1 to everything. That's your baseline. So EVERY race except humans has a whole bunch of ability penalties. Each gets a couple of abilities where they don't have a penalty (expressed as a +1 to make it the same as the baseline human), but the rest of the ability scores are at a penalty.
A hill dwarf has -1 DEX, -1 CON, -1 INT, -1 CHA. Hill dwarves are clumsy, sickly, stupid, and boorish compared to humans. But they at least have average STR and WIS.
It's not penalties that seem to be the problem. It's just calling them penalties that seems to be the problem. Simply moving the baseline and calling them a "lack of a bonus" - the exact same thing - seems to solve the issue.
What do you think?
If we did just give these dwarves a penalty to Dex, Con, Int, and Cha, then humans are even better than these dwarves as compared to their current "+1 to everything" (as is in the current packet). That is, the base dwarf with straight 10s can't take a 10 and succeed on any Dex, Con, Int, or Cha check, while the human can succeed at all of them. That's a huge difference when you compare that to the current packet (where both races can take a 10 and succeed on all of them).
Because of the mechanics,
the penalty is actually a penalty. The -1 or -2 penalty to an attribute check is actually a bigger penalty than it might look like at first glance.
Personally - I think penalties are just fine. I like penalties and bonuses to be noticeable, so +/-2 to DEX and CON for an elf feels about right to me. Vary it a bit for subraces, of course.
I agree. +2 / -2 works fine. I like a little more options than that. Generally, I have a "+2 to A. Optional: +2 to B or C, and -2 to X or Y" approach to races and attributes (though with some variation, depending on the race).
But, it's good to keep in mind what those penalties actually are, and humans getting +1 to everything is better than "these dwarves get -1 to Dex, Con, Int, and Cha." At least, it's better for all non-human races, as it stands. As always, play what you like