Okay, so I was around for this, so I saw what was involved and the outcome. To do the exploit involved filling your ship with some valuable cargo and then leaving it parked in a spot where it was technically not landed, in order to intentionally glitch the cargo grid. This would then let you sell the same cargo over and over.

The result of this was huge amounts of ships littering the landing zones in a completely unintended way, which would tank both the FPS of anyone else in the area and the server tick rate. This in turn makes the game look worse, it hampers efforts to test other things, etc etc.

As for the testing of exploits argument, CIG did say in their announcement that such is actively encouraged. They only suspended accounts for people who were doing it over and over and over and over and over. Basically anyone who was just using it to grind huge amounts of in-game money and making the play and testing experience for everyone else worse. Most of these people weren't even reporting the bug.

Probably a lot of them were selling the credits on ebay, which… yes, is a thing, sadly. Even though progress is still being wiped occasionally, there's still gold farmers. There's actually a warning you have to click through every single login for this, but I've seen people argue for it, the idiots.

BTW, it's in alpha right now, not pre-alpha (which I don't personally believe is a thing).