When I host a server I try to make it as hard as possible for the players to be banned. I feel that if there is an exploit on a server and someone abuses it, that is the host's problem and he needs to fix it. Most people I ban are those who abuse chat which is really hard for a host to fix without ridiculous mods that would do more bad than good.
Some may think being a harsh and strict admin is key to success, but I think it just encourages bad behavior. When I see an admin like that, the first thing I want to do is retaliate. Admins that are easy-going and don't act like a king but still are not complete push overs, are the admins I feel like behaving for. Jail RPs are just not a good type of server because there are so many things players can do to get banned. In my national socialist Prison, only trusted people are allowed to be the guards and as a result players have to try very hard to be banned.
I do not hold grudges as well. If someone is banned from my server and waits out their ban and then comes back, I welcome them to have another chance. If they somehow manage to mess up and get themselves banned again, I will see them when they are unbanned and welcome them back.
