Is there a word that means "standard of activation" or "trigger condition"?

If your standard is merely nominal, you might call it a criterion.

some reason used for making a decision

If it's measurable or even merely ordinal level that triggers an action, then you have a threshold.

the point at which something changes

Perhaps this is the line in the sand

a point beyond which, once the decision to go beyond it is made, the decision and its resulting consequences are permanently decided and irreversible.

Wikipedia

While there are other meanings for this phrase (suggesting that the boundary is mutable), its current usage tends to convey a firm limitation.

Another phrase in common usage is litmus test

A decisively indicative test: opposition to the nomination became a litmus test for political support of candidates

Oxford Dictionaries Online

Prerequisite could apply here:

/prēˈrekwəzət/, noun, a thing that is required as a prior condition for something else to happen or exist

https://www.google.com/#q=prerequisite

"The prerequisite for this punishment, while potentially useful, is overly restrictive: it fails to apply in many cases where we'd like it to do some work.

This punishment, while potentially useful, is burdened with an overly restrictive precondition for activation. It means

A condition that must be fulfilled before other things can happen or be done.

Also, you may consider sine qua non

a necessary condition without which something is not possible.