Neither and I would caution against the use of the expression 'punished' since that implies that the main reason behind this was a punitive one (though the communist experiment of Béla Kun as well as his attempt to ally with the Soviets indeed wasn't really well received by the West), which wasn't the case.

First off, the cessation of such large amount of territory wasn't really a demand of the 'West' per se, rather these were the demands of the Entente allies in Central and Eastern Europe (CEE) - namely Czechoslovakia, Romania and the Kingdom of Serbs, Croats and Slovenes (or Yugoslavia if you will) - that were merely mediated and in fact even moderated by the Entente. It is worth noting though that there were different perspectives among the Entente on this issue with France generally being the most harsh (or to be more precise most willing to listen to the concerns and demands of its allies in CEE) while the US and Britain being most lenient.

France however backed these claims vigorously not because of some sort of a desire for vengeance, hatred or even fear of Hungary but because of a desire to appease its allies in the region, that would act as a pro-French bloc and 'cordon sanitaire' against both Germany and the Soviet Union, though the exact nature of this bloc was still unclear as was the Hungarian place in it.

Now, the territorial demands may seem harsh, however you have to bear in mind, that the Hungarian position at the end of WWI was virtually untenable and in fact even worse than that of Germany and was bound to lose a large portion of its territory come what may - Aside from the fact that it stood on the losing side, was completely encircled by the Entente allies that had substantial territorial demands against it and was economically decimated by the WWI, it suffered from a communist coup under Béla Kun in 1919, who proclaimed the so-called Hungarian Soviet Republic, refused to agree to the territorial concessions and tried to recapture the territories that were being occupied by Romania and the newly constituted Czechoslovakia. The Hungarian Red Army had some success against the Czechoslovaks, who were still in process of actually organizing their armies, however it was ultimately defeated, the Hungarian Soviet Republic dissoluted and the Romanian army entering and occupying Budapest as well as the vast majority of the country. At that point, Hungary was in every way a beaten country and couldn't really do much to avert the substantial loss of its land.

However, it is worth noting that Entente did not want Hungary off the map nor entirely crippled and moderated the demands of their CEE allies. In fact in France, there were rightist circles that wanted a sort of an anti-Soviet Danubian Bloc with the inclusion of Hungary - France wanted to explore this option after Trianon and before the battle of Warsaw (aka 'The Miracle at the Vistula') with a possibility of a border revision in favour of Hungary and on the expense of Czechoslovakia, this was primarily motivated by the threat of the Soviet Union, that was pushing into Poland as well as French desire to have more control over the CEE region. This pro-Hungarian approach was mostly pushed by Maurice Paléologue, a veteran French diplomat and the secretary general of the French ministry of foreign affairs at that time. However, the Polish victory in the Polish-Soviet war as well as the formation of the anti-Hungarian Little Entente made this idea both less desirable and practically impossible, so it was ultimately abandoned.

Sources:

DEJMEK, Jindřich: Zrod nové Evropy: Versailles, St-Germain, Trianon a dotváření poválečného mírového systému, 2011

LORMAN, Thomas: Counter-revolutionary Hungary, 1920 - 1925, 2006

WANDYCZ, Piotr Stefan: France and Her Eastern Allies, 1919-1925: French-Czechoslovak-Polish Relations from the Paris Peace Conference to Locarno, 1962