From the Terms of Use:

"Using or exploiting errors in design, features which have not been documented, and/or "program bugs" to gain access that is otherwise not available, or to obtain a competitive advantage over other players;"

This is their catch-all - clearly the win-trading problem is an error in design, and by exploiting it you are gaining a competitive advantage.

I guess it depends on the server you are playing on, but on Frostmourne win-trading is rampant and arena points sell for around 0.8-1g/pt (7-800g netting you 1000-1200 points), and if you can afford it you can buy yourself a 2000 rating for about 3000g. The -hard-to-obtain- (i.e. S3) PvP gear has become generally ubiquitous on our server and I think that Blizzard are finally waking up to the fact that people are generally unhappy with the situation as it stands. Try doing your daily quests on a PvP server when 75% of your opposing faction can literally two shot you until you're wearing S1/2 gear.

In the end unhappy people will not continue to play and Blizzard must see this, thus I presume that this and future patches will provide a band-aid to the situation and hopefully we will see a new PvP gearing mechanic in WotLK. I'm not looking forward to seeing the days of the Grand Marshall grind again, but there has to be a middle ground :)