The penal laws were not dreamed up by William. They were thought up and enacted by the Irish Parliament, which was packed with Protestant "settlers" who had gained land there under the Stuarts. William allowed the laws to stand because he was more interested in the war against Louis XIV than in the fate of Irish Catholics. Anne let them stand because she was a bigoted Anglican. George I let them stand because he did not want to risk offending the protestant power players in his new kingdom by being merciful to Catholics. George II cursed the penal laws that deprived him of Irish troops, but recognized that changing the laws would only lead to an uproar, since the vast majority of his people were protestants, a large number of whom were making a comfortable profit from Irish misery.
It is true that many Irish lost their lands under William, but it is also true (per biographies of Cromwell and books about the Civil War) that the bulk of the Irish who lost property in the seventeenth century did so under Cromwell, an injustice that Charles II and James II did little to address. When land in Ireland was confiscated from various regicides after the Restoration, Charles II handed it out to his friends rather than return the land to the rightful owners.
William deposed James because the threat posed by Louis XIV outweighed any loyalty he might have felt to him as his uncle and father-in-law. At the time of the Glorious Revolution, Louis XIV was planning to make himself (or his son) Holy Roman Emperor thanks to bribery and/or intimidation of five of the eight electors. Louis had gobbled up a great deal of German territory already, including the duchy of Lorraine, through conquest and (illegal) chambers of reunion. Louis also had hopes of conquering the Dutch. Keep in mind that his son had a strong claim on the Spanish throne and empire, and you see what a recipe for disaster was brewing vis-a-vis the balance of power in Europe and in the colonies.
William and the Allies could not risk allowing James to sit on the sidelines; by and large, many of the Allied powers were poor, particularly the Austrian Habsburgs, who were simultaneously at war with the Turks at that time. The Allies needed the resources England could provide in money and in troops, as well as its navy.
William also could not risk the possibility that James might use his fleet against the Dutch in conjunction with Louis XIV, something the Stuarts had done before.
If James had remained on his throne and if the Allies had been defeated, James might have held on to his kingdoms, though there is some evidence that Louis had designs on Ireland. James almost certainly would have lost his colonies, which, in the long term, would have made Great Britain a third-rate power.
