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Sundiver: I read your post VERY carefully. Why would we want to notify anyone of banned hosts? The cheaters would run like cockroaches to the next host, and we would have to start the whole process all over again. You don't think that the host themselves isn't aware of the situation? In many cases the hosts have modified thier services specifically to disguise or obscure who they are just to help their clients screw us over. I won't post them, but there are chatboards where people spend their entire lives trying to come up with ways of fucking over link sites and TGPs.
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This is not for me but I will answer
I understand your position. But some linklist owners even don't understand why banned hostings are in the shared blacklist - they think that this hostings host something illegal, but they already use this shared blacklist. But we are talking about simple linklist cheating, right? So every host can be in this blacklist.
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The shared blacklist (which I don't use, BTW) is just a tool like any others. I think most host bans are done on an individual level, and not as a group thing.
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Unfortunately some guys do that, sometimes they are small linklist. They ban hosting and add to shared blacklist. The other guys use it. Some guys can even delete listed sites from this host to be sure there are no cheaters listed. Then the poster needs to change hosting because he don't know who banned him.
As for closing submit form. I think it's not too difficult to do that if you have some traffic on your linklist and big webmaster database and if it's not too difficult to get an account. Good guys who use banned hosting will contact you with the examples of their sites, and you will get lots of new posters. And this system will be rather more profitable for me too.