That's great until a game designer discovers that grief chases away the majority of players, and the griefers themselves will leave if they have no one to grief.

So from a philosophical perspective sure you're right. But from a dollars and cents perspective it's just good business to find ways to legislate griefing out of games. And that's why the market moved the direction it did.

Players don't want to be continually victimized. That game design drives away all but a tiny minority of players.

turns out it is for a lot of players which is why the kind of game is extinct. Just like in the real world, there's a fine line between risk and adventure and walking into something that looks like Liu Cixin's the Dark Forest.

You want enough friction to generate interesting interactions, you don't want so much freedom that the worst exploiters start to crowd out every honest player, because then, just like in a rundown lawless neighborhood, you're getting a lesson in the broken window theory and you're only left with the scammers.