I must say, I disagree with your grey area stance.
I could say that cheats are stupid and bad, go into detail about why, and leave it at that, but someone already did a decent job of that, so I'd like to offer a different angle.
There are three types of traders, in any game. I will detail them below:
Note that these are only the most basic of types, and apply to all games. I could detail pokemon-specific subtypes, but that would take a long time :P
1. This type follows the rules strictly, usually because of some code of honor. The more cheats that are allowed, the more of these people will gravitate elsewhere, to places that follow the same honorable gamer code that they do.
2. This type is willing to bend the rules, but not break them. These people usually have a similar code of honor to the first type, but feel that breaking certain rules in certain ways is "not that bad" or "technically not against the rules". This is the kind of player who will trade you clones without telling you they're cloned, because "what you don't know won't hurt you", and "to your game, it's the same thing as a legit Pokemon", but wouldn't trade you something like a Wondereye, because that's real hacking, and that's wrong. These players are also known for "playing like everyone else is playing". In other words, they adapt to the methods of the general community. If they play in a place that hacks, they become hackers. If they play in a place without, they tend to become legitimate.
3. These players are the lowlife of any game. They cheat to win, exploit bugs and glitches, and will do anything they want to get what they want, not adhering to any code of honor. These people care nothing for fairness, only for what they can do with their shiny fancy Action Replay device. These people will hack movesets, abilities, etc. without any regard to how the game was intended to be played. These players will stay regardless of any rules changes, since they have little care for rules anyway.
Regardless of the game, you will always have some of each type of player. No matter how many other people are playing with hacks and clones, you will always have Type 1's who want only legitimately obtained Pokemon. No matter the rules, you will always have type #3's trading hacked Pokemon to some poor unsuspecting newb for the Shaymin he went all the way to an event to get.
The hacking rules, no matter what you set them to, really don't affect types 1 and 3. Even if you completely allowed hacking, type 1's would either ask for non-hacks or trade elsewhere, and type 3's would sneak around, either offering hacks when the mods aren't looking, or disguising their illegitimate Pokemon as the real thing.
This leaves only type 2's affected. The closer you get to allowing all cheating, the easier it is for a type 2 to justify his/her illicit actions. Things like "Well, it's a clone, but the game doesn't know the difference!" will become things like "Well this place allows hacks, the other guy should have known I'd trade him hacks." Conversely, the closer you come to a no-cheating-whatsoever policy, the closer type 2's will play to complete legitimacy.
Very few people, if any, would actually leave if you barred all cheating. Type 1's would enjoy it, type 2's would cheat less, and type 3's would do the same thing they will always do.
I ask the people in charge to read this and take it into consideration, and I ask the regular members to show support of this post.
Linear Mode
