I don't play diablo 2 so I'm not sure, but it seems to be the equivalent of half life where your cd key is your ticket to play online. If I'm understanding this correctly, then blizzard banned thousands of people from playing online at all. I don't cheat, and personally feel it should be punished by floggins a la Singapore, but Blizzard banning those people is more wrong than cheating.
First, those a$$hole cheaters paid to get a valid cd key just like anyone else. At least in America, when you pay for something you can do pretty much anything you want with it. A company has NO RIGHT WHATSOEVER to take something away from you because they don't like the way you are using it (unless maybe you are infringing upon their copyright). For instance, I can buy a cd of a crappy band like Creed and use it to wipe after eating Mexican food. Their Eddie Vedder wannabe lead singer can't come by and take it back merely because he would prefer his work reside in my cd player than in my bathroom.
I think Blizzard needs to take measures to ensure cheating can't happen (like Valve will with Steam), but taking away those user accounts is nothing short of illegal. If I was a Diablo 2 player who just had my game "stolen" by Blizzard you can bet I would be sending them letters threatening legal action, as they are so quick to do regarding Bnetd.
Stealing accounts from users is a shoddy move by Blizzard. They need to put some real effort into fixing their problem of cheating. Cheating is a HUGE problem, I am not unaware of that fact, but after hearing that they have no problem stealing from paying users I have absolutely no problem stealing a copy of Warcraft 3beta. While I'm at it I think I'll find an ISO of Warcraft 2 Online and both diablos, then play them all on Bnetd.
I understand everyone's complaint about cheating (I probably whine about it more than anyone else), but if you don't look at this emotionally there is no way you can think Blizzard did the right thing.
By the way, Bluecat, you are absolutely correct in that some innocents will suffer. Further evidence that Blizzard is completely wrong and someone needs to impart to them that once they sell their product, they've sold it.