Having extra time to try and settle things through open play and only resorting to penalties if open play doesn’t resolve things seems sensible to me.
I think you previously suggested letting open play continue until either party scores. That’s fair but the problem is that you don’t know when the goal will come and an open ended match lacks the certainty that the TV channels, sponsors and fans need. I seem to remember that there was an 11 hour (!) tennis match at Wimbledon, in 2010, because neither of the players could achieve a breakthrough. I think the rules have been changed since!
Penalties are cruel (as an England fan I know this only too well!) if the technically best team loses, but in sport a successful team needs to be technically excellent AND lucky.
Sport would be boring and predictable if the technically best team won all the time. Penalties give the underdog a chance, which personally I like (so long as my team wins!).
All the best,
Jon
PS. Well done Croatia!