Offsetting Penalties???

A funny thing happened in the Central/Mastbaum game.  I'm standing on the sidelines, collecting stats, and Central drives down to the Mastbaum 3.  After that play, a couple of players got into a minor scuffle, but it was enough for the flags to start flying.  The call by the head referee was a Dead Ball Personal Foul, on both teams.  He then gave the universal signal for "offsetting penalties".  The ball was place at the 3.  After a quick consult with a couple of the other officials, 15 yards was walked off against Central, taking the ball to the 18.  Then, the official turned around and walked back to the 9 and placed the ball there.  When the linesman came back to my sideline, I said, "What just happened there?"  He said, "Both penalties have to be walked off, and since the ball was only at the 18 after the first, you go half the distance, to the 9."  I asked, "Why?"  He said, "Well, it does make sense when you really think about it."  I responded with "No, it doesn't.  If the penalties offset, why is one team penalized?"  (Central lost 6yds on the offsetting penalties). He promptly turned and ignored me.

Now, I'm not going to quotes rules and regulations, mainly because I don't know what should happen in this situation.  But, I do know one thing.  If penalties are offsetting, then nobody should gain an advantage.  If what the officials did was correct, the rule is, plain and simple, a stupid rule.  If what the officials did was wrong, then it explains a couple of other questionable calls that I witnessed in this game.