Yes, he was not banned simply because he used other people's content. He was banned because he was using other people's content to create low quality apps which (even if unintentionally) imitated official applications. Taking someone else's content and serving it up in a way that looks like it's official is just asking to be banned, especially when the thing you're imitating is YouTube and the app is on the Play store.

If someone is, for all intents and purposes, spamming your app store with imitation apps, why should you waste time giving them a "polite human touch"? If this had been a Chinese company rather than someone with a sob story would you still expect Google to offer a polite human touch?