Well, their methods are crude, but they work, kinda.  It would have been more elegant to make sure the cheats did not work at all, but what the hell, this is a first step at least.  Maybe the 1.05 patch added more than we first thought?  Hopefully that is the case, and hopefully they will do even more to stop cheating in the near future.  Here is a copy of Blizzard's post:

In keeping with our aggressive stance against hacks and cheats, we have permanently disabled 1,000 CD keys from ladder play on Battle.net, resulting in the permanent closure of approximately 2,000 accounts that were tied to those CD-Keys. We have also permanently closed 27,000 additional accounts and disabled 16,000 CD keys from ladder play for one month. These accounts were determined to have used a hack or cheat program while playing Warcraft III on Battle.net. In the case of the CD keys that were banned, at least one account tied to each CD key was identified as having used such a program while playing on Battle.net.

We continue to monitor the Warcraft III realms for malicious players. Please note: repeat offenders risk having their CD keys disabled, which results in permanent removal from Battle.net for their copies of Warcraft III. We regret having to employ these extreme measures; however, certain unscrupulous players have impaired the game play of the Warcraft III community as a whole, and severe action continues to be warranted and required.

We appreciate your understanding and cooperation in this matter. If you would like to report additional instances of hacking or cheating, please contact us at hacks@blizzard.com. Thank you again for your continued support.

-- Blizzard Entertainment