[Threshold]

Pretty much everything related to entertainment ultimately boils down to personal preference. But in a MUD/MMO, the personal preferences of the masses are a factor as well. Nobody plays the game in a vacuum, and non-botters are affected (sometimes profoundly) by those who bot. So choosing to ban or permit botting affects more than just people who would bot - it affects the people who want a game that does not reward botting as well.

There is also a very real dynamic where the game developer has to protect the player from him/herself. There are things a player would do if they were given the option, even if that thing would reduce their enjoyment in the long term. Either Raph Koster or Richard Bartle has a whole treatise on this, and they sum it up with an axiom something like: "Players will do the most expedient thing to get from Goal A to Goal B, regardless of how fun it is." Players will frequently do things that actively reduce their own enjoyment of the game if they believe it is advantageous or expedient. Some players even realize they are doing this at the time, and that just makes it worse.

And here's a non-competitive example of the damage botting can do. I remember when my wife and I played Final Fantasy XI (whichever one is the online one), and we got into the fishing. It was pretty fun, and the fish were a pretty valuable commodity. I enjoyed chatting with the other anglers, and it was a bit of a community of its own. But then fishing bots became available, and soon enough there was no more chatter around the fishing hole. Eventually it was all bots. Botting destroyed the social aspect of fishing, which ruined a lot of the fun even for people who weren't botting.