So, innocent intent or not, no one from The Marvel Family who was cognizant of or heavily involved with the one-shot kills could realistically argue that their actions did not result in gain for themselves, or cheating others out of a great deal of hard work.
Does Karatechop deserve a permanent ban?
Maybe. What newer players may not remember is that something like this has happened before. Blizzard's handed down perma-bans in the past to people who deliberately made things a lot easier for themselves despite claiming justification for doing so, and the sole difference here is that players went from exploiting a vulnerability within an .mpq file to taking advantage of a GM's mistake. In this case, Blizzard bears a larger share of the responsibility for having sent the item in the first place, but The Marvel Family did everything else on its own steam. A mistake is a mistake, but one-shotting 14 raid bosses is most assuredly not a mistake. The former was not intended to occur, whereas the latter was very much intended to occur, so they are not morally equivalent actions.
Blizzard had no reason to believe that Karatechop and the guild would not have continued to use the shirt to amass server-firsts, gear, and guild progression far beyond what they could have done on their own. I've seen a lot of people argue that the guild bears no, or diminished, responsibility for what occurred because none of it would have happened if it hadn't been for Blizzard's error, or that the guild was somehow owed a joyride through raid content due to the slowness with which Blizzard dealt with Leroyspeltz's account issues.
That argument, taken to its logical conclusion, becomes progressively more and more untenable. Would Karatechop and the willing players among his guild also have been entitled to all Tier 9 world-firsts, Gladiator, and all subsequent world-firsts in future content just because a GM made a mistake returning items to a hacked player (especially when you consider that Blizzard isn't the bad guy when players compromise their account security)? One player got himself hacked, so his entire guild is inconvenienced and deserves a free pass through all present and future content? Of course not.
If there's a case to be made for leniency, it's this; I think Blizzard greatly underestimates the sheer hold that the game's plumbing and secrets have on player interest and imagination. Reading about players who managed to wall-jump to Hyjal or visit GM Island or what have you is fascinating, and most of us enjoy being able to peek behind the curtain on occasion. I don't blame Karatechop or The Marvel Family for their almost giddy reaction to finding an item that does not officially exist, although they are (as stated) entirely culpable for the pwn-a-thon that ensued. While Karatechop and Leroyspeltz bear an extra share of responsibility for having brought the item to the raids, every player who knew of Martin Fury's existence and was willingly present for the one-shots is equally guilty, so it's somewhat unfair to hand a ban solely to Karatechop. Either everyone involved should get the banhammer, or no one should.