I think he deserved losing his admin rights.
That he didn't break any actual law doesn't mean he is suitable for being an admin.
With his action poophammer showed a weak character, being ignorant and ruthless towards others, which per definition disqualifies him from an admin role. Someone who does such ugly things on the market place will do other ugly things, too. It's only a question of time.
Setting up some rules of conduct for admins here in the forum could help preventing similar situations in the future. The basic rule could be "Don't be an asshole to any member of the cRPG community, at any place (cRPG, forum, other games, ICQ, real life, etc.), at any time, or you will lose your admin rights."
In this case poophammer clearly played the jerk and deserved his punishment. As I said, it's a sign of bad character. I never liked him, anyway, and now I got confirmed in this.