Was Rabbi Akiva really flayed? And what did/does flaying mean? And why such a torturous and horrific/despicable punishment?

The Talmud (Brachot 61b) relates how the Romans tortured R. Akiva to death for teaching Torah, by removing his skin with metal combs. It isn't written anywhere that it was a punishment!! To the contrary (Menachot 29b)! As a matter of fact, most national leaders in most historically significant events, are not "judged" as individuals, but rather receive according to our national and historic needs. Even the suffering of a regular individual often has nothing to do with punishment, for God runs the world on many many complex and various levels with many different challenges, of which reward and punishment is just one of them...