That controls your wastegate, which when closed, allows the turbo to build pressure (or compress the incoming air into the engine), or "boost" as they say...On an oem setup, it uses an internal wastegate which is basically a valve that is on the housing and allows exhaust to bypass the turbo, to a degree (even fully open you'd get *some* to spin the turbine...Sounds like the much of the exhaust was allowed to bypass the turbine wheel, so would make sense. Good you fixed it.
I would invest in an aftermarket boost gauge though, as that light bar thing is worthless.