Permanently ban is a big loss for players who spend lots of hours or money on their accounts.
And it's their loss, because they ignored 1-3 prior warnings, depending on their behavior. If they can't be bothered to listen to warnings and follow the rules, Riot can't be bothered to have them playing their game.
Permanently ban cannot solve anything but make people disappointment.
Well, the majority of permanent bans typically result in the banned player leaving League, so that is actually something getting solved.
...should everyone who has been banned get another chance to play?
What, like the chance they got after the 14-day ban? Or the chances some get before that with the 25-game and 10-game chat restrictions? Those kinds of chances?
Sorry, but if someone blows up to three successive chances at reform, I don't think they're going to. And neither does Riot, which is why their policy is that no permanent ban will be lifted unless it was applied in error.
Should permanently ban change to Season ban?
No. There are a number of problems with a Season-long ban compared to a plain old Permanent ban, which are as follows:
First, Season-long bans favor players who are toxic later in the season over those who are toxic early on. If you get a season-long ban somewhere in February, you may as well just start up a new account, because you're not going to be playing your old one until November or December, if not later - and that's implying you even remember your login info for that account, or care to get back on it.
Meanwhile players who get banned a week before Season's end don't have to wait much longer than they would with a 14-day ban, and can just go back to playing with hardly any lesson learned.
Second, Season-long bans do not reinforce the point. At some point or another, Riot has to put their foot down and say "look, we've given you ample opportunities to get your shit together, but since it's clear you don't want to follow some very simple rules, we're gonna have to kick you out."
If they could just start back up to playing League from that same account after the ban, then what message is the ban even trying to send? There's no repercussions to being toxic, since clearly, you only get just another time-out rather than an actual punishment.
That's why they use Permanent bans - to hammer home the point "if you don't follow the rules, you don't get to play the game." - and there's no stronger message than losing countless hours of progress and purchases. That kind of actual, tangible loss is often enough to get toxic players to leave League - as Riot intends - or at the very least shape up so they don't lose another account.
Third, As mentioned before, getting banned early may as well just be a permanent ban. Getting a Season ban at the start of the year pretty much is the equivalent of getting a full-blown permanent ban, because the only other solutions are to leave or create a new account, and by the end of the year, you may not even remember your account credentials or want to play on that old, banned account.
So at that point, what's the point in making it Season-long? Why not just make it permanent and be done with it?
Between the disproportionate length of early bans, the inequality of early bans compared to later bans, and the fact that just slapping on another temporary ban with no permanent ban to serve as an actual "we don't want you playing anymore, please leave"...Season-long bans are a terrible idea, and they don't even look good on paper.