Again, I think it needs to be a sliding scale (if it's light wind, they won't be foiling anyway). They just need something that can quickly be communicated, measured and observed. The blue idiot light takes the concept a bit too far, and takes away from the viewing experience.
I'm coming to agree that the answer is a penalty time adder - they can display it right below the race time on the TV for each team somehow - kind of like penalty time in soccer. A boat that gets dinged with an infraction just occurs a finish time penalty. They get a 10 second penalty time (or whatever, for each infraction). If your opponent also makes an infraction, one infraction cancels the other out and you are back to zero. When the boat with a penalty crosses the finish line, you see their penalty timer start counting down and if the other team isn't across when it hits zero - they win. I think the time adder would be pretty insignificant relative to wind conditions.
This would also give them the option to assess different size penalties for different infractions too - something that isn't done, or certainly would be decipherable, with the current system....say, in the case where Artemis went outside the boundary and got a second penalty for being out there too long...10 seconds for the first and then 5 seconds for each 10 seconds you spend outside the boundary. You could take out a few of the arbitrary judgement calls this way too and let the computer do the computing and assigning the penalty.