I think that removing the achievement and loot was certainly fair. But for someone to say that Ensidia didn't report this so that they could try to get away with it is asinine. They were completely aware of the fact that GMs and Devs would be present at the world first kill of an expansion ending boss. Quite honestly, the most constructive thing that they could do for the benefit of themselves, Blizzard, and all of the bandwagon Ensidia-haters is exploit the encounter, find the flaws, and point out all of the ways in which Blizzard failed to provide a quality product.
At such point, they deserved to have credit for the kill removed and, after the hotfix, resume their pursuit of the world first legit kill. Blizzard's actions are frankly childish; they are a lumbering infant wielding a banhammer. The essence of their hypocrisy is summed up in the wonderfully done and woefully misunderstood satire that muqq put in his blog.
I understand that Blizzard had every legal right to do what they did, and even some small degree of justification to take minor disciplinary actions. However, being legally sound is not the same as being reasonable, or practical, or to some extent morally justified. The extent to which they overreacted is what is truly laughable in this decision, and to exact this punishment on a group dedicated to your product seems infinitely idiotic. Poor form Blizzard, better luck next time Ensidia, and to all of you who post things like "LULZLULZLULZ THEY DESERVD WAI WURS, PERMABAN IMHO", please get better at this game, or stop queuing for dungeons on my server. Please.