In my opinion, and he's my favorite fighter of all time, Penn had the more humiliating ending. Liddell just got old and had a war of a career. By the end you could just tell his body wasn't able to do what his mind wanted it to. While it's in a way sad I don't think there's really a loss of dignity. Sure, I'd have rather seen Liddell walk away while he was ahead and not get pounded on but some people have to touch the oven to know it's hot.
Penn on the other hand has been brutal to watch. He wasn't training right. His head was obviously not in the game. He was fighting one (and quite possibly two) weight classes above where he should be. He didn't seem to respect how far the sport has grown in the last 5 years and how much better the competition is getting. Several times in his last few fights you could see him quit in the ring. To me that's far more humiliating and harder to stomach as a Penn fan. He'll always be my favorite, and maybe that makes my opinion jaded, but there it is.