It kinda gets different when you're talking about a series of actors intermingling in an environment designed by the seller. There are certain expectations for the experience that was sold to you, and another customer disregarding the social contract of what the expected environment is supposed to be like is problematic.

It's like buying a ticket to go to a theatre. You expect the people around you to also use the product and environment in a way similiar to you. Someone on their phone, screaming at the movie, throwing their feet up on your chair, etc, isn't okay, and the people who defend their selfishness with "I paid to be here, I can do what I want" deserve to be kicked out. Cheating on an online, competitive game is no different, and I expect such players to be kicked out so the rest of us can have the experience we were promised when we made our purchase.

Does this mean the game in question should have full control over the code you're running on your machine? I mean absolutely not, no one is strip searching you at the entrance of the theatre, but there need to be some degree of limitations on how individuals interact with the shared environment that consumers are being offered. The theatre doesn't allow you to take videos, and doesn't give you access to a copy of the film to clip, or edit to your hearts content, and the notion that the consumer should have such rights seems insane. But taking an online game, editing the files, and then connecting to everyone else's shared experience and forcing your version on others should be protected, because the code is running on your machine? To be clear, I don't think you're seriously suggesting that is the case, but therein lies the problem: there's a lot of weird nuance when it comes to multiple consumers being provided a digital product like this. How they interact together is inherently a part of the sold product, so giving consumers free reign to do what they want once the product is in their hands doesn't work the way it does with single player games, end user software, or physical products.

The real problem is the laziness of devs not hosting their own server environments, so I hear you there. But that is, unfortunately, a problem seperate from whether hackers should be held accountable for ruining a product for others.