But again, I can see where LJ might be in a bit of a bind because if there is a journal reported as advertising child porn and they give them a warning, the user(s) can delete the material and claim it was never there.

That may be, but in this case, LJ came right out and said that they knew the content wasn't child porn or anything illegal. It was just content they didn't care to host. That's why I think the steps they took were pretty harsh.

I agree that they'd need time to review the journal to ensure that it wasn't blatantly illegal, but in a situation like this, where they review it and find nothing illegal, they should give the user warning to remove the content before permanently banning their account.