As long as the following part of your plan is strictly enforced, I'd probably go along with that plan.
If Joe commits a single violation during the probation his account would be terminated permanently.
Although I think that the plan Matt and Fred are trying to implement calls for only releasing Joe into the wilds of iHub when they deem him really ready and when there is a good chance of success. It's my opinion that if you release him before he has demonstrated he understands his problem that he'll be terminated from iHub permanently in a short time.