From Riot Tantram:
It really breaks down into two categories.
1.) Helping players reform
2.) Shielding others from the behavior, at a cost.
We used to issue chat restrictions that essentially scaled indefinitely.
We were able to determine that after a certain point the penalty no longer helped with reform. The 10-game and 25-game counts for chat restrictions are based on data that they were both light enough, and felt strict enough to encourage people to understand their behavior is unacceptable in game and change it.
We also saw that the players in this 'large restriction' category defaulted to gameplay altering means of harassing their team. It caused an increase in feeding and trolling.
The sample size of this population and time frame is huge. Essentially the time spanning from the introduction of chat restrictions to the introduction of IFS.
So my question for you is, would you rather have more feeders and less negative chat?
This was just with infinite chat restrictions, so imagine how much worse it would be with actual perma-mutes.
Bottom line: If someone isn't gonna behave properly despite being given multiple chances to do so then why shouldn't they be removed from the game?