Fighting games will never be taken seriously as a competitive sport, or as valuable entertainment if people don't give enough of a shit to at least play the game they signed up for. The spectators, the organizers, and the players are all part of the experience and if one them fucks up then whole experience is fucked.
Spooky had the the right and the power to put what he considered a disgraceful exhibition because it would be an insult to the spectators and of course a big insult to the TO's. Playing on the big stage should be an accomplishment, not a chance to dick around, especially when there is money on the line.
I think this has a lot to do with the double-edged sword of having top players at your local weekly.
Purely from a player stand point, while it's amazing to have them there because you can play against some of the very best and get better by playing them and to see if you can beat them. There's also the downside of knowing for a lot of them, this is just practice or a fun way to try out some shit that they'd never pull at a major, and know that you might not do well, while still taking it seriously.
Now for the viewer perspective, these are the guys you wanna see play most of the time, but you also wanna see them playing at their highest level because that's why you enjoy watching them. Which gets hindered when they don't take it as seriously as viewers would like.
And then from the TO/Streamer/Sponsor perspective, players not taking it seriously seems to give them the feeling of "If they're not even gonna take this seriously, why the hell should I/we even bother?".
I think it's that rift that causes a lot of issues.
Now, with locals, I think this is a bit extreme because, at the end of the day, it's still just a local, and aside from a few such as WNF and NLCB (sorry of there are more people take seriously, I just can;t remember them right now), not too many people even care.
I think this is a rule that should be more enforced at Regionals/Majors, where there should be a more clearly defined outline for it to avoid issues with mistakes, and then weeklies/locals go about their normal business.
Just my $0.02 on that right now, but always an open mind.