First off, when you enter the pvp arena anything is fair game, and you do not have to return anything to anyone if you kill them. Me and phinx were handling the situation, and I'm pretty sure Phinx told him the player didn't have to give him his things back.
Blaze had agreed to pay 100k for his armour and tools back, and when he was given his stuff back, he left without paying. That is considered something called scamming. He knew what he was doing, and which this resulted in his ban.
Edit: If you were not there for the situation at hand, I don't suggest making a comment about how staff messed up about it... although my only recommendation to him is to make an appeal.