That's an excuse IMO. There are very clear-cut cases of scamming, and yet the scammers never get banned. True, their trust page ends up looking like it was splattered in arterial blood, but the end result is that their account is still active and they can pull off more scams if potential victims don't (or can't) see the red trust.
I never understood why scammers aren't banned, but it's a fact I've come to accept in my time as a member here. I always keep in mind that this isn't my forum and I don't run it. That isn't to say you shouldn't try to suggest improvements, and I applaud OP for writing his post....but the sad fact is that I'm fairly certain nothing is going to change.
Flags were created to attempt to supplement the trust system and make scammers more obvious. I feel like there's both sides to a coin; on one hand, banning scammers would prevent them from pulling off more scams, on the other, banning them forces them to create a new account and continue scamming.
Giving anyone the rights to ban users for scamming does introduce a potential situation with the conflict of interest. IMO, they tried to strike a balance in between by just giving the users easy access to the facts for them to make their own decisions while not banning the user completely. It's not perfect but it is a compromise.