To answer simply: no, your soffits should not be insulated, and there is a chance that your insulation has been damaged by this.

Should I insulate my eaves?

A minimal amount of insulation at the eaves results in energy loss, which is unfortunate, but not a major concern. ... The only downside to having this type of insulation installed is that it's more expensive than other types of insulation, and the work should be performed by an experienced spray-foam insulation installer.

Why are soffits bad?

Often, soffits are ventilated to allow air to flow into the attic and upper floors of a home. Clogs and blockages in the soffit and fascia components could cause poor ventilation. Dirt and debris become lodged into the soffit and fascia vents and block air flow.