In an official forum post, ArenaNet support liason Gaile Graybanned players why they were banned:
"I’ve seen the numbers, and the damage to the economy could have been substantial, if the exploit wasn’t closed down and if these people were allowed to use their ill-gotten gains. People whose accounts were terminated were the worst offenders. I’m talking a lot of ill-gotten gains that posed a significant potential impact on the economy.
"Any time you take one thing and can make two, and then four, and then sixteen… ya gotta know that’s just wrong. (I won’t quibble on the odds, but overall, that form of doubling was not outside the realm of possibility.) And to perform that action hundreds and hundreds of times? That’s call “exploitation,” and that’s against the User Agreement, the Rules of Conduct, and all that is holy.
"I know the OP will disagree. But we’ve been more than kind, in the past, and everyone needs to own up to his/her errors and recognize: We all are part of the game economy, and those who exploit it are hurting the rest of us."
Gray finished the post, "Exploit closed. Worst offenders terminated. That’s what has to happen to make things right for all of us."