Listen dude, it's spam. I can give you my personal definition of spam, which I hope is illuminating: if it's not transactional and not from a personal sender, it's spam. You can ask your users to define spam, it will reduce to more or less what I described. Tough cookie!
I think this is, generally, the correct approach. There isn't really a salient reason to discriminate between "email I don't want from someone I don't know" ("true spam", if you will), and "email I don't want from someone I do know" (aggressive newsletter campaigns et al). Spam is the button to send a signal that you got an email you didn't want.
> My reaction there is to remove the reporter from all lists because the amount of damage a single spam report can do is immense; a single spam report can block delivery for weeks at a time to the 10k others that legitimately requested messages.
This is the system working as intended to me, as the customer of the email service. I like that my email provider is throwing their weight around to put the fear of God into bulk senders and forcing them to think about how this campaign will impact their sendability. I would much rather annoy the hell out of bulk senders than cede emails to spammers like we have with phones.
In most other cases (e.g. newsletters sent based on a tiny pre-checked checkbox or without asking for consent), the spam button is of course the right tool.
Sounds like it's working as intended.