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It was about more than just the basic trademark stuff. He was, from what I read, registering domain names that were typos of popular kids sites and then sending them to porn console hell.
I think they considered it a "scam" rather than just trademark fraud because of the scale of his operation and that fact that losing numerous trademark lawsuits/arbitrations didn't stop him.
If you are a trademark owner, you can spend $10k to get back one domain, then he registers 10 more copies of your name. Then you spend another $10k, and in the meantime, he registers another 60 typos. And so on. With all the money in the world, you can't win, because it takes 20 seconds and $6 to register a domain name and 8 months and $10k to get it back through the legal system.
He had a lot of warnings and lost quite a few individual cases before the FTC took this drastic step.
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