I don't know how hard this is from a developer standpoint.. but why didn't they shut down all instances of the operation once they had knowledge there was an exploit (damage control?)
Not taking any steps whatsoever seems to me that it made the situation even worse, because now there are far more people that have abused the exploit than there would have been.
Like many people posted they can either commit commercial suicide and ban a very large portion of their population (and yes, it is a very significant portion)
Or piss off the legitimate gamer's that were yelling and screaming for a fix that didn't come for weeks.
I don't envy them right now