A couple more notes.

Someone mentioned (quoting a comment by Gabe Newell) to me that idling wasn’t cheating the system because, as the drops were completely random, they weren’t gaining an unfair advantage over other people.

If they weren’t gaining an advantage, why did they need to use the program? Of course they were gaining an advantage, and they knew it. If the hats drop randomly while playing, and you devise a third-party program that allows you to be “playing” while you do other things like work and sleep, then you are gaining an unfair advantage over people who are in-game less due to playing legitimately. You’re not taking away from their chances to get a drop, but you’re making sure you’re playing by different rules than they are.

Additionally, this whole fiasco has caused a fascinating (to watch, not so much to experience, I’m sure) rift in the TF2 community. The halos vs the non-halos.  People are being banned or kicked from servers based solely on whether or not they have a halo or not. Players are refusing to heal those with halos, and creating mods which turn the halo into a glowing neon “Fag” sign.

It’s remarkable how important intangible digital clothing can be to some people.