The fall was overblown but there was definitively a touch so in that sense the penalty was justified. However, I'm not convinced there wasn't offside because it looked like another Urugay player touched the ball before it reached the striker. But they showed the replay only once and I'm not sure.
Yeah, the call was a heartbreaker but by the rules the ref was correct in his call. It was certainly a card (contact with the player's feet, no chance at the ball), and in the box it's gotta be a red. Should have given the Uruguayan a yellow for exaggerating the dive, though.