Punishment. It’s a scary word. We don’t like it when people punish us, and we certainly don’t like it when it seems to be the threat meant to keep us doing mitzvos. Would you ever think to put punishment in the same boat as kiddush Hashem? Of course not, kiddush Hashem, is honoring Hashem, and punishment is what happens if you don’t honor Him.
In reality, the Netziv (18:25) says it’s just the opposite. Avraham davens to save Sdom, and he makes two arguments. If there are tzaddikkim in Sdom, it would be a terrible tragedy to compare the evil inhabitants with the righteous ones, and furthermore, it wouldn’t be fair. The Netziv explains that the comparison would result in a punishment that does not show that evil is a cause for destruction because the righteous were also destroyed. He calls that a chilul Hashem. If world events show that being righteous and serving Hashem are reasons for salvation, that is a kiddush Hashem, if not; a chilul Hashem.