If Google is incapable or unwilling to present credible evidence in case of alleged contract violations, they are in breach of fundamental social assumptions that will reassert theselves one way or another.
Google certainly knows that. Their calculation is that automated first response is a way to make their service scale, because a high percentage of what they think is click fraud will be click fraud and most of the fraudsters will not fight their decision.
That's fine, but it doesn't mean that people who have not committed click fraud shouldn't fight Google's decision. If Google isn't completely stupid, they will improve their appeals process to filter out justified complaints or regulators will strike them down, and rightly so.
And I speak from experience. I know this because a very large ad based site of mine was banned for being in violation of a vague line in their TOS. It was automated and I really didn't know what I was doing wrong. After a month of writing every contact form and google email I could find, I got an actual response and was reinstated after being told what I was doing wrong. Afterwards they withheld a large amount of the prior month's earnings which they refunded to the advertisers.
Sadly, though I was technically in violation, they simply showed me another way to do the exact same thing. There was no fraud, and I was out about two months revenue, but at least I now have a few direct contacts at Adsense for the cost. Very, very expensive contacts...
My main point however is that Google does not keep a penny of the withheld funds. It goes back in full to the advertisers who paid for those clicks.
Hacker News patrons would be equally up in arms if the article was about AdWORDS paid ads that a small website owner found to be fake clicks, paid money for, asked for a refund, was refused, and wrote a blog about. Google really can't win.
This is the issue. I've never seen that happen. Every account I've read of a closed AdSense account, accounts that were in good standing for years, has the entire balance of the account taken.
Sounds illegal to me.
If my bank decided they didn't want me as a customer anymore I'm pretty sure I'd want my deposits back (!!!). If I did some work for a customer and then they decided to keep the work, but not pay me, and wouldn't say why, I'm pretty sure they'd end up in court ASAP.
The way Google treats publishers is appalling.
I gave up on that website since I couldn't even make back the hosting costs.