Not really tossing baby / w bath water.
Its called a consequence for failing to follow the law.
You know if you do something wrogng you don't get to keep the proceeds of it?
I know it sounds horrible, that you should be able to nullify illegal activity, just because its that way, but yes. Their should be a penalty for failing to do things lawfully, in order to keep them from doing it again.
Yes, if a bank is robbed, the perps should not be able to keep the loot.
I'd like to see the government penalized for their actions. How better than to nullify their actions and make them pay.
I am sure if the stakes were a little less, they'd be retroactive relief. The problem here is the precedent of "NOT" granting the retroactive relief, is far worse to the next case of this than it will be for granting it.
I don't think they want to set this precedent. That's the risk they take.