Disclaimer: I was banned from AdSense too and I still don't know what happened. Since my site had very low traffic, I suspect even one well meaning fan could clickfraud me into nonexistence.
I wonder how we could generate an economic incentive for Google to adopt it.
Want to incentivize Google? Convince Bing to implement it and see if Adsense customers convert as a result. If I felt Bing was treating their customers/vendors (ads is a really weird relationship :) better, I would consider using it (since as a search product it has approached Google pretty close).
But I can weigh in on the "make the action exponential" idea. Regarding the steps that the webspam team takes, we take stronger and stronger action as we see repeated violations or violations with more willful or damaging intent.
Hidden text might result in a 30 day removal, for instance (and the site can always remove the hidden text and do a reconsideration request before the 30 days is up, of course). But if we see the site repeatedly violating our guidelines or doing worse stuff, then the action is stronger.
Or do you remove them and not tell them at all, leaving them in the dark completley?
You can read the whole message that we send, but the relevant part would be "In order to preserve the quality of our search engine, pages from somewifi.com are scheduled to be removed temporarily from our search results for at least 30 days.
We would prefer to keep your pages in Google's index. If you wish to be reconsidered, please correct or remove all pages (may not be limited to the examples provided) that are outside our quality guidelines. One potential remedy is to contact your web host technical support for assistance. For more information about security for webmasters, see http://googlewebmastercentral.blogspot.com/2008/04/my-sites-.... When such changes have been made, please visit https://www.google.com/webmasters/tools/reconsideration?hl=e... to learn more and submit your site for reconsideration."
As infractions get more serious and we believe that the SEO/site owner is more willful, we give less information to the people who do spammier things.
Hope that helps to answer your question.