Well, looks like LJ finally realized how fubar it was, and apologized. On the one hand, certainly no one wants to provide a safe haven for such reprehensible people, but on the other hand, mass strikethroughs sure as hell aren't the way to go.
I am still concerned, however, what the fallout from this will be, and if the TOS is going to be changed or what any other long-term ramifications will be. Being a sexual minority, I see things like this and my instinct is, "I'm next." I hope my permanent account wasn't a mistake after all.