why is there no three-on-three play if two players per side are penalized at the same time ?

It's call coincidentals. If a pair of players (one player from each team), or more than one pair, take the same penalty at the same time then neither team loses a player on the ice. So if two players were to take coincidentals for fighting, then those two players would be in the box but there would still be five players on the ice for each team. The same thing happens when there are two pairs in the box.

They off set each other...I don't know if your an NFL Fan but if you are it's like if a Defensive player A is called for pass interference on Receiver A and across the field Receiver B is called for pass interference on Defensive Player B the penalties will offset.

Thus is the same in hockey nobody will get penalized (aside from those who committed the penalty) there for it's 5 on 5.

It is basically the Wayne Gretzky rule. The Oilers used to coax penalties just to open up extra ice for the Gretzkys, Messiers, Kurris, etc.. Imagine a skilled team today who goes out with certain guys just to draw penalties and create open ice for their top skaters. Think how wicked it would be to have to try and stop Ovie, Backstrom and Green or Crosby, Malkin and (insert d-man) or that type scenario any night. It would make for ugly games, going back to 5 on 5 discourages teams from turning games into part fight night, part skills competition.