What was Jem's punishment ? Did it fit his crime?

Yes !!! 

Jem has to go over to Mrs. Dubose's house every day and read Ivanhoe to her.  I'd say the punishment fits the crime. He has to care for the things he attempted to destroy, and yes, do something as easy as reading out loud to an old lonely woman. Certainly Atticus had a much larger lesson in mind. Jem learned about not judging people until he knew them and he soothed a lonely old lady’s spirit.