Here's my personal opinion on this. If person x wants to make person y's idea, but better, whether it's through means of administration, builds/events, execution etc, they can. It encourages competition and the players get to decide which they like more so they always win.
What they both did wrong was they started verbally assaulting eachother instead of striving to get better and give players better experiences on their servers.
Let me also mention this: The host, Joe, didn't build anything on that server according to Auto. If this is true, all the builders were just allowing Auto to host it.
Joe also still had the ability to host it. All he needed to do was get new admins. The server would still have his name on it and everything, nothing was taken away from him and any regular players of his server would more than likely still come back.