I think unwritten rules of etiquette probably are punishable, in the sense that "don't be an ass" is essentially rule zero of every site ... but surely they were acting in good faith here, to discourage low-quality submissions (in however misguided a manner) as the karma system is supposed to?

I really don't see why this can't simply be punished going forward. Ideally, the people responsible will know to stop and no-one will ever need to be banned for it. After all, isn't the main problem that it was driving away users?