To be fair, I used to think that way about people who would go to jail when I was younger and naive. Yes, certain people deserve to go to prison and belong there, but there are also some people who changed because of what happened and it was a wake up call to them to change their lives. Unless the specific individual victimized you or someone related to you, you don't really have ANY right to judge them just as they shouldn't have any right to pass judgement on you.
Even though it is extrapolating on your idea with them having broken the rules and getting punished, what do you feel should happen to them AFTER they serve their "time". They are supposed to be reintegrated back into society with the hope that they are reformed after serving their time. The sad truth, though, is that they often aren't able to get a good job because of their time served and are often viewed negatively because of their past actions, even if they changed. Anyways, the only permanent way to "remove" them from being a "hindrance" to society would be their death, and while some people do deserve it, a LOT don't. They are people too and deserve your respect until they prove otherwise. If you relate that to LoL's, it is similar. The only "legitimate" way to remove this problem is to perma ban them, which is essentially death. While some people who continuously exhibit negative behavior will end up getting banned, those who don't want to compromise their account will hopefully end up changing. Even IF they get banned, hopefully they will be changed enough if they make a new account for it to not happen again.