You stole 12 games? You deserve what you get.
The tweet in question was misleading, and that's the only problem with this. However, the tweet wasn't /wrong/, because those games aren't free in those regions, they're unsupported. Oman doesn't support Xbox Live. He asked "Can you get banned for downloading a free game in a different region?". It wasn't a free game in a difference region; it was a glitch that those regions could access xbl at all. You abused a glitch to fraudently steal 12 games, whether you realised it or not. And it's not their responsibility to make sure *you* know whether you're cheating their system or abusing a glitch. If you shoplifted because you didn't realise thievery was a crime, that's not the problem of the shopkeeper, that's your problem, and they have every right to permanently ban you from their establishment.
Your past purchases are irrelevant. If I give £1 billion to charity and then murder someone, I'm still a murderer. They don't want to do business with someone who cheated their system to steal 12 games from them, they have every right to stand by that decision. I don't even like Microsoft, but this is your fault, and someone needs to bring you back to reality on this instead of all this bashing of a company who've made a perfectly fair judgement. If you were such a loyal customer you shouldn't have tried to abuse their system.