From what I can see, that server you mentioned seems to be a demo server. Demo servers overall (based on my own experience) are pretty bad. It seems that there are a lot more uhm.. how should I put this.. less serious racers in demo servers, that prefers seeing cars go off the track rather than on it. The situation doesn't get better when the server has the type of admin(s) you described. Bear in mind here, I'm not saying that all demo players are bad drivers, or are intentionally wrecking. I'm not saying that there are no serious players in demo servers. I have met some players in demo that were nice to talk too, and to race against but overall I try to stay away from demo servers when I'm doing pick-up racing simply because I feel that the quality of the racing I get in S2 servers are better, most of the times anyway.
Since that guy who banned you obviously is an administrator, he has the right to do whatever he feel is right. Especially if he is the server owner. We can whine a lot about being banned without a cause, but in the end it's all up to the admin. If he/she doesn't want you in the server, it is his full right to remove you.