It certainly does fix a lot of things. I can think of a few myself!
It can get toxic players a penalty, giving them awareness and time to reflect on their attitude. Possibly reform. Oh here's one! It can discourage toxic players from ever wanting to play this game again due to them losing the account.
Then they come and entertain the board by asking them how they did they get banned or how they didn't deserve it. A lot of them also come here to insult Riot and threaten to never give them money again or if they don't unban their account, they're going to sue them.
After that, we'll probably never see them again.
Then that's the best profit of them all. The less toxic players there are, the less of a chance we'll see them.
But then again... they do breed harder than rabbits. Damn internet safeguard influence...
Oh well, there's always the mute function!