I'll let you know first, the island of Atlantis is fictional (as I can't tell how much you know from your title- I know you put supposedly but I want to make sure). Scholars have given some opinions, but without further archaeological evidence though we can't go with anything other than fictional really at this point. If I were to get into that I could go on basically forever. I'll just say most Atlantis stuff comes from more...pseudo-scientists than Greek scholars. Seriously my Greek Archaeology professor in University would get terribly bothered every time someone tried to bring it up. It is really most likely that Plato created it as a literary invention for the ideas he discussed than anything else.

The only two mentions of Atlantis we know of come from dialogues by Plato who lived in the 5th- 4th century BC in Athens (so classical Athens) and even then the characters within his dialogue considered this "Atlantis" as ancient.

Here's a passage from "Timaeus"

"For it is related in our records how once upon a time your State stayed the course of a mighty host, which, starting from a distant point in the Atlantic ocean, was insolently advancing to attack the whole of Europe, and Asia to boot. For the ocean there was at that time navigable; for in front of the mouth which you Greeks call, as you say, 'the pillars of Heracles,' there lay an island which was larger than Libya and Asia together; and it was possible for the travelers of that time to cross from it to the other islands, and from the islands to the whole of the continent over against them which encompasses that veritable ocean. For all that we have here, lying within the mouth of which we speak, is evidently a haven having a narrow entrance; but that yonder is a real ocean, and the land surrounding it may most rightly be called, in the fullest and truest sense, a continent. Now in this island of Atlantis there existed a confederation of kings, of great and marvelous power, which held sway over all the island, and over many other islands also and parts of the continent"

and this is from "Critias"

"But at a later time there occurred portentous earthquakes and floods, and one grievous day and night befell them, when the whole body of your warriors was swallowed up by the earth, and the island of Atlantis in like manner was swallowed up by the sea and vanished; wherefore also the ocean at that spot has now become impassable and unsearchable, being blocked up by the shoal mud which the island created as it settled down"

"Let me begin by observing first of all, that nine thousand was the sum of years which had elapsed since the war which was said to have taken place between those who dwelt outside the Pillars of Heracles and all who dwelt within them; this war I am going to describe. Of the combatants on the one side, the city of Athens was reported to have been the leader and to have fought out the war; the combatants on the other side were commanded by the kings of Atlantis, which, as was saying, was an island greater in extent than Libya and Asia, and when afterwards sunk by an earthquake"

As you can see, this apparently happened while there was a sort of battle going on between Athens and Atlantis. Which I actually hadn't really delved that much into, as my literature studying centres around Homer. But looking at this, you have to realize as well - that he is saying that events of Atlantis at the time of Classical Athens was 9000 years ago, and that it was an island greater than Libya and Asia combined, which is why it is hard to apply it to a real place. Overall what I would say is two things, 1) that it didn't seem that in the end Poseidon really did like Atlantis that much, being the god of oceans and earthquakes this seems like a pretty specifically Poseidon-y punishment, and 2) that the idea that Athens was prevailing over an area controlled by Poseidon makes total sense to me considering that Athens' patronage was at one point contested between Poseidon and Athena, and as you can probably tell, they went with Athena. (not that they didn't like poseidon, don't get that idea, being the naval power they were, but you can see this on one of the Pediments sculptures of the Parthenon, one end - can't remember which direction- is the birth of Athena and the other is the fight between Athena and Poseidon for Athens.)

Timaeus is here if you'd like to look- http://classics.mit.edu/Plato/timaeus.html

and Critias here http://classics.mit.edu/Plato/critias.html

Update- I did find this RIGHT AT THE END OF CRITIAS

"Such was the vast power which the god settled in the lost island of Atlantis; and this he afterwards directed against our land for the following reasons, as tradition tells: For many generations, as long as the divine nature lasted in them, they were obedient to the laws, and well-affectioned towards the god, whose seed they were; for they possessed true and in every way great spirits, uniting gentleness with wisdom in the various chances of life, and in their intercourse with one another. They despised everything but virtue, caring little for their present state of life, and thinking lightly of the possession of gold and other property, which seemed only a burden to them; neither were they intoxicated by luxury; nor did wealth deprive them of their self-control; but they were sober, and saw clearly that all these goods are increased by virtue and friendship with one another, whereas by too great regard and respect for them, they are lost and friendship with them. By such reflections and by the continuance in them of a divine nature, the qualities which we have described grew and increased among them; but when the divine portion began to fade away, and became diluted too often and too much with the mortal admixture, and the human nature got the upper hand, they then, being unable to bear their fortune, behaved unseemly, and to him who had an eye to see grew visibly debased, for they were losing the fairest of their precious gifts; but to those who had no eye to see the true happiness, they appeared glorious and blessed at the very time when they were full of avarice and unrighteous power. Zeus, the god of gods, who rules according to law, and is able to see into such things, perceiving that an honourable race was in a woeful plight, and wanting to inflict punishment on them, that they might be chastened and improve, collected all the gods into their most holy habitation, which, being placed in the centre of the world, beholds all created things. And when he had called them together, he spake as follows"

Which - where it ends there- is literally all we have, it's lost after that, so it is hard to say what Plato said Poseidon or anyone else did with Atlantis, but the humans inhabiting Atlantis seemed likely to blame.

So hopefully that answers your question, I did type a lot so hopefully I didn't get all jumbled up, and if you want me to explain anything further let me know!