If the rules are not really clear and simply left up to discretion (I.e. if you think its bad dont do it,) this will always be the result.

Do the simple thing, quit arguing with them, and have you or someone on your team design a clear set of rules and post them somewhere publicly available (preferrably accessible from in game.

If so many people are willing to come forth and say they never knew about it, then obviously something is wrong, and taking the defense here isn't going to improve their experience.

They want clearly defined rules -- this is not an unreasonable request.