Why did they receive this specific punishment? Sefer Zer Zahav quotes Rav Wolf of Strikov zy’a as explaining that the sin of Korach was that he accused Moshe Rabenu of haughtiness by asking, ‘Why do you raise yourself above the nation?’ The Torah says that Moshe was the most humble man on the fact of the earth. Chazal explain that he was so humble that he was ‘down on the ground.’ Still and all, he led the nation with strength when it was necessary for him to do so.
Korach was punished for claiming that Moshe was not truly humble. Moshe was humble ‘until the ground’ but Korach said this wasn’t enough. So he was told that if he felt he could be more humble, he could go down even below the ground.