This makes a lot of sense, and I completely agree on a couple counts, namely:
1) We have a crappy set of rules.
2) This is more about "I hate Loki" than "Loki is a constant rulebreaker."
However, I'm going to have to still support some action against him, because mob mentality or not he is still, along with Destiny Hero, probably the biggest repeat offender on the forum. To let it go unpunished because nobody likes him isn't the best idea.
Instead, what I'd propose is that the moderation tighten his leash, a lot. By this I mean that instead of a ban or suspension directly because of this topic, none of his major offenses get ignored like most usually do.
As was said, though, the only fair way to do this would be to apply it to everyone, because outlaws are plentiful here. Just see how everyone acts in a topic about him. When someone flamebaits and someone takes the bait, you punish both because flaming does not become okay just because it's tempting.