All in all this can be useful. It's a nice way of keeping track of whose been doing stuff they weren't supposed to, as well as who's arguing with who and to what extent the silly argument has gone, since the host or extremely well trusted SAdmins can't be around all the time.
In a sensible server, it can prevent giant drama stuffstorms later by giving the admins some warnings of what's going on and who's been buttloving who. In an insensible server it might scare a few idiots into not being such god damn idiots but in these servers things usually deteriorate regardless.
This isn't an instant "I report you = you're banned" script, it just highlights stuff so admins can deal with them in an ordered manner later.
