You have the right to complain about the system, but just as a heads up, Blizzard is not bound by their own Terms of Service. They have the authority to do anything to your characters/accounts, it's a private service owned and run by them.
Technically, your accounts/characters aren't your own, but the property of Blizzard Entertainment, you have license to connect online but are bound to ToS along with any decision Blizzard makes.
Well, I'm not talking about whats right or wrong, or how they should treat their customers, just correcting one of your statements claiming that what they were doing is illegal, that's all.
If it were my guess, they aren't reforming the IP restriction system because BNet 2.0 is in full motion and after D3 is released, their next step is to convert all legacy games (war3, d2, sc1) to that platform, so it would be an inefficient use of resources. But again, that's just speculation.
