Well, things seem to be dying down. SA/LJ has posted not once, but twice to the news feed apologizing for what happened, acknowledging that they screwed up and promising to fix things.
As for me? Well, I'm sticking around. Still debating whether or not to get a permanent account when they go on sale next month, but that's just as much finances as it is whether I'll feel comfortable with it.
I guess the reason this whole situation got me so riled, aside from Six Apart/LiveJournal's complete dropping of the ball when it came to timely communication, was that it smacked too much of the way TOS abuse reports were/are handled at Fanfiction.Net. Seriously, it's way too similar, right down to the person whose account got suspended being set a form e-mail saying "here is a list of ways you might have violated our TOS". On FF.Net it's a good way to get revenge against someone who has pissed you off in a review or something; just report their fic, watch it get deleted and have a good laugh.