A lot of good points are being made in this and other threads. I'd like to respond to some of the arguments brought up and also give my own opinion on the subject.
I used to be on the side of the "everyone deserves a second chance" argument. What I like about this policy is the fairness of it. Even a user who commits a serious offense on our servers gets a chance to better themselves. The sad truth is however that most users who use a hacked or modded client don't alter their behavior after having been punished. The rate of recidivism is actually even higher than that. In my country, the Netherlands, roughly 75% of offenders are rearrested within seven years. Half of those are rearrested within a year. A quick google search tells me that the rearrest rate in the US is around 70% (
source). Just to clarify, I'm not comparing cheating in a computer game to real life crimes. But these numbers do show that, generally speaking, people have a tendency to keep breaking rules, even if they were punished for breaking them before. It would be interesting to see statistics on this for bans on MCGamer, but I don't think that information is tracked. Speaking from my own experience as a moderator however, I think 70% is a good estimation of the amount of users who reoffend after having been punished. And if so many users reoffend, why give them the courtesy of a second chance? It seems rather pointless to me. I'm well aware that moderators make mistakes. I know for a fact I have made some. But fortunately there's a system in place to correct those mistakes: a system of Ban Disputes. Also, in my opinion the length of a ban doesn't have anything to do with the legitimacy of it. No one should passively endure a ban or have a ban on their record which they think is unjustified. If you believe a ban is unfair, dispute it. Furthermore, when a banned player tries to log on to our network they get information on the reason and duration of their ban, and a link where to dispute. So everyone should be able to dispute their ban if they want to.
Now, what about the users that do stop hacking after having been banned? I'm sorry but I can't feel sorry for anyone who would get perm banned for their first hacking offense. The rules state clearly: "No Hacked or Modded clients are allowed EVER". The only thing that isn't in the rules is the duration of their punishment. You would have to do some digging on the forums or ask around to know what the actual punishment is. For all they know, we could have a zero tolerance policy against hacking. Yet, they take the risk anyway.
Even if a user didn't read the rules, I think it's safe to assume they knew they were doing something wrong. This may apply less for less obvious hacks/mods like Damage Indicators or Gamma Alteration. Those hacks/mods also have a less disturbing impact on a game, so I could see an argument to be made for keeping the two strike system for those kind of offenses. But that's a different discussion.
Lastly, what to do with users who have been banned once in the past?
Nulla poena sine lege praevia. It wouldn't be fair to retroactively perm ban all the users with one existing hacking offense on their record, since the rule wasn't in affect at that time. This wouldn't apply to new bans under the new rule. They would be able to get perm banned on their first offense.