This is somewhat tangential, but research on the influence of video games on behavior has been showing that games can and do indeed have measurable effects on behavior and mood. It's quantifiable; it's certainly not as strong as Jack Thompson (woah, nostalgia) would want you to believe, but it's there. From what I understand, the long-standing rejection of this idea by gamers is a consequence of cognitive dissonance.
http://psp.sagepub.com/content/early/2014/01/22/014616721352... http://www.sciencedirect.com/science/article/pii/S0022103113...
What I have problem with is the stance of the admin/dev/supervisor/whatever towards a user who fund and exploited a bug.
Humiliating publicly a game character was never in the context of the game. The character didn't lose a battle, the admin took over the account by force and eliminated the character, then he published the video for other users to see. Imagine if the death sentence in the US was not an electric chair but a Colosseum-like show with lions eating men alive, broadcasted on national TV. They were going to die anyway, so why not make up a show, use the money for ... I don't know, public education/research? :-) - would that make the action appropriate/ethical/understandable?
This is not another virtual death otherwise we wouldn't be talking about it, would we?
Except this isn't real death. It's a game! The fact that you're having so much difficulty distinguishing between the two is a little worrisome.
We're talking about it now because someone in the media reported it. Sometimes importance is an effect of media reporting rather than a cause.
But, it was a nice job equating virtual pixels with real life death. Do you have similar views regarding the fact that I just had to torture an NPC with an electronic prod?
Since the whole narrative of the game is combat in the first place, with thousands of virtual deaths per hour, you could say it's appropriate in context. It's also arguably more fun - and that's why people play.