Just a thought - think people are being a bit too hard on Pennsy's "obsolete" steam power. Many/most railroads had scads of older steam locomotives up to dieselization. For example, the quite profitable Burlington Route (it kept co-owners Northern Pacific and Great Northern out of bankruptcy during the Depression) had only a handful of modern steam locomotives: 36 4-8-4's, 16 2-10-4's and 16 4-6-4's. All the rest of their steam power was composed of elderly 4-6-0's, 4-6-2's, 2-10-2's, 2-6-2's, 0-6-0's plus a big cohort of O1a 2-8-2's of early '20's vintage (the last Burlington steam locomotive in regular service was an O1a in 1959). Many railroads looked the same, a veneer of "modern" steam locomotives supported by a large cast of older locomotives. Look at the huge Southern RY - it never had a locomotive with a 4 wheel trailing truck.
The Pennsy's locomotives were bought and paid for, and essentially did what was asked of them - although I will grant, quadruple headed I1 Decapods on ore trains was hardly a paragon of efficiency.
I would lay the bankruptcy of the Penn Central more on excess physical plant that could not be rapidly trimmed, due to govt regulation, not being in tandem with a shrinking industrial base (moving to the non-union South). Plus excessive labor manning/obsolete work rules that could not be trimmed due to union recalcitrance and political interference.