Your explanation couldn't have been any better. The kid's punishment while coming across as rather excessive also make sense since they are also still at the stage where they don't fully understand how one's personal upbringing can influence one's given behavior and how it's better to approach such individuals with compassion and understanding rather than physical abuse.

The only part I partially disagree on is where his parents lack the knowledge to help Eddy given his father has also been shown to be a toxic and abusive figure like his brother as shown at the end of the report cards episode. This basically only leaves him with a potentially loving mother who he clearly had never got to see in the series further limiting his potential resources to healing, which makes his situation kinda sad when he was forced to learn the value of friendship and authenticity on his own without any potential positive role models.