The long and short of it is that they got it right as you described the play. In high school football, we use the "All But One Principle" in enforcing penalties. The All But One Principle says that, with the exception of penalties with special enforcement provisions, all penalties are enforced from the basic spot except for a foul by the offense that occurs behind the basic spot. The basic spot for a running play is the end of the run. Under the All But One Principle, a foul by the defense is therefore enforced from the end of the run unless there is a special enforcement for a particular foul. For a facemask, there is no special enforcement provision so it is penalized from the end of the run. In your case, that is the 34.
Not meaning any disrespect to your officiating friends, but there is nothing anywhere in the rule book or the case books that talks about penalizing the offending team the most. That is just another myth that has been floating around for years. If we followed that logic, you could have a run from Team A's 5 yard line that goes for a 95 yard touchdown and have a holding foul by Team A on Team B's 10 yard line. Does anyone think that should be penalized by bringing it back to Team A's 5 yard line and penalizing them half the distance to the 2 1/2 yard line? That would be what would penalize them the most. Of course we don't do that. We would penalize 10 yards from Team B's 10 yard line and A would have first down on the 20.
