I think they were too strict on this one. I don't think it's fair to bankrupt a company forever for dodgy seo. hopefully it's not permanent?
Let's be honest, their competition is probably doing the same, but since they are famous on the tech scene, and their actions get on news sites google people read, they get penalized.
1. its not permanent. these type of things are usually for 60 days. see (http://readwrite.com/2012/01/03/google_forced_to_punish_itse...)
2. If everyone is "doing the same", then they are all likely to be punished equally, since they are taking active movements against it.
I think people are assuming that because rapgenius is being hit, no other lyrics sites are