I don't see a need for blocking regular members. They're harmless. In your particular case, it seems like booting him from the group reminded him that Waymarking exists. That's a good thing.
I don't think an open/close enrollment option should be necessary. It complicates group reorganisation.
I like the idea of a little bling next to my username because I pay to play.
I think Waymarking has to create an official process for reorganising a group when the leader or majority officers disappear and I think this process should involve Waymarking approval.
My two cents. 