Be careful about how much blame you spread.
As I've said before: a lot of hardcore TF2 traders already had numerous Steam accounts that were "in good standing" with Valve (meaning they had spent real money on Steam and had been active for 90 days after that purchase). These accounts have existed ever since the TF2 item drop system started. And according to the Valve terms of service, these accounts cannot be treated any differently than your main account.
What makes this so difficult for Valve to deal with is that they have allowed these alt accounts to exist for months, and in many case, for years. They have allowed players to use them to earn TF2 items for free, because in many ways these farmers actually propel an economy which urges players to buy keys and other items in the TF2 Store.
Then this contest rolls around. They can't ban these accounts all of a sudden; the backlash from their TF2 cash cow would be phenomenal. And so we now see their response: the rules for the contest only prohibit using "scripts, macros, or other automated means" to generate entries. So if someone manually logged into numerous accounts in good standing, completed objectives, and manually traded coal back to their main account, they were not in violation of any rules.
I'll agree that Valve handled this poorly. But it's not as simple as it sounds.