Change to the ban system.

[BillyKaplan]

I have an FC mate who found himself in a comparable situation.

What I find to be the most comparable here is that what your friend did was actually reportable. I sympathize with their situation as I've spent the most of last night carrying O12 myself on my healer. But no amount of abuse directed at you is justification for you performing it yourself. Your friend should've kept their mouth shut and took it, or left the instance. Report the lot of them at the end either way. But instead, they "snapped and lashed out". They brought this on themselves, similar to what OP did.

it's only okay when THEY do it!

I mean, your friend would've had to report them for anything to be done to them, and it doesn't seem like they did, so I don't understand what you're complaining about here. Both sides were in the wrong, one simply bothered to file that harassment report.

It would be a nice way to reward someone who is trying to improve their behavior.

I think the problem here is that there's no way of telling apart those who are improving, and those who simply didn't get caught. Oftentimes the difference between a ban and not-a-ban is someone bothering to file a report, and making it a proper one. So during that year, our offender could've still kept at it, but somehow got lucky enough and wasn't reported. A lot of stories end up in the DF thread instead of the GM's inbox, for instance, a lot of people aren't sure if it's reportable or are lied to, don't know how to file a report, etc.