Wrong. Several TLDs (AL RU AT at least) pulled it at the registry level.
Also, at least two registrars (Google in the case of one domain, Network Solutions in another) did go way above and beyond 'not wanting anything to do with it' by stealing the domains outright instead of just telling them to move. This is, at the very least, just as problematic. And at least in the case of Google there was no basis whatsoever in their ToS for doing it.
If you don't want to do business with someone, you shouldn't voluntarily enter into an agreement to do so in the first place. And if you decide to stop doing business with the person in question, you certainly shouldn't actively prevent him/her/it from doing business with someone else instead. (Plus at the very least refund the cost and possibly pay damages for breaking the contract prematurely, but that's a minor detail in this case.)