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I suppose I should clarify something about property. Physical formats are considered to be Masters. Digital downloads are considered to be Copies. It is legal to sell a Master, but it is illegal to sell a Copy. A master by its nature carries ownership. There is no way to confer ownership on a copy. You can copy your master, but you most definitely cannot sell the copy. You must be able to physically transfer the ownership with a legal device. That being the original physical media that housed the data. You are also no longer at that point allowed to retain any copy you have made. They must be destroyed, erased, or repurposed.

This is the foundation of international copyright law. You must be able to physically prove that you own a legitimate item for you to transfer the ownership to another party. When you download a product you have given consent to waive your right to have a physical transfer medium. You own what you have purchased, but you have no means to prove that your data is either unique, not reproduced, or legal. Simply put it is a matter of practicality you cannot prove that what you have is in fact something you have a legal right to sell.

Anyway this understanding is accepted both internationally and locally. Regardless of what country you live in your courts have accepted this definition. Without this definition reproduced content could not be protected. The basic technological infrastructure would fail. So even if you feal this is in some way unethical is very much necessary for the public good.

Speaking to terms of service. Yes it is true that it isn't clear that as a whole they are legal. However in this instance the terms merely reflect the law. You cannot knowingly disseminate material that is harmful to minors. The names this one user was using were pornographic in nature. There is a lot of latitude in this area, but with 34 instances it plainly shows intent to engage in criminal behavior. When you game on Live you know you are doing so in the presence of children. That means you must conduct yourself in a censored manner.

Yes I know that most kids on Live are foul mouthed little dicks, but that doesn't mean as an adult your civic obligation is just rescinded. Your position grants you additional privileges, but that comes with responsibilities. I am just plain glad that this twerp is gone. With this kind of disdain for the rules one shudders to think how he behaved within the service. I am not having a hard time imagining this guy trying to cyber with children.