It has been noticed through experimentation in psychology, that when normal everyday people are put into a position of power over a group of other people (especially if it's a team of people governing the actions of another group of people), it often happens that the people in power tend to act in a more and more abusive manner as time passes, especially if there's no deterrent to stop such an abuse.
Such a deterrent in real life situations is usually the law and the threat of severe punishment if a person in a position of power starts abusing that power. A typical setting where there's a constant struggle between the urge to abuse one's position of power and the fear of the consequences happens in prisons: It's a generally known fact that prison guards tend to become more and more abusive towards the prisoners if there are no deterrents to stop this. This has been verified with actual experiments.
Often even people who would never do such things may get lured into abusing their position due to peer pressure from their fellows who are also in the same position. It may start with a sense of duty and camaraderie between the members of the group in power. (In a way, it makes sense. The members of the group in power have to be able to trust each other so that nobody will go behind their backs or do anything harmful to the group, lest the consequences be severe. For example in a prison setting if there was severe disagreement, fighting and disorganization between the guards, they would be significantly less effective at controlling the prisoners and, for example, shutting prison riots as soon as possible.)
Because of this sense of duty towards their comrades, they may feel discouraged to criticize or report minor violations of proper conduct of their peers. In fact, the rest of the group might reprimand the one person who makes such a critique, with the rationale that if they don't keep their camaraderie, it would lead to chaos and disorganization, etc.
And without external deterrents, these "minor infractions" have a natural tendency to escalate. A few minor infractions may go uncriticized and unreported, and thus they become normal status quo. Then someone makes just a slightly worse infraction, which likewise is tolerated by the rest, and so on. (Only if someone goes way overboard, then something might be done. However, as time passes, and the standards of what's "going overboard" and what isn't gets higher and higher, the overall behavior will get worse and worse.)
In the internet era there is an environment where precisely this kind of situation is in place, and it's special in that there's basically no external deterrent limiting how far those in power can go. This environment consists of online discussion forums, wikis and other such sites where people can submit material.
Of course the consequences of abusing a position of power are much more minor than in a real-life situation (such as a prison) because no people are physically involved in the process, but the same psychological phenomenon is still in full effect nevertheless.
Many website admins and moderators may be competent and always make rational and justified judgments on what is and isn't appropriate conduct. However, at least as many are also much more prone to abuse their position of power over regular users. Some of them can be quite petty and can not stand any critique on their decisions, and can overreact (eg. by completely banning a user for a minor infraction that would have not otherwise been even close to deserving such an action.)
The group mentality often plays a role in this as well. The over-reacting moderator may try to rationalize and justify his actions to the other moderators, and especially if he/she has been in the group for a significant amount of time, the others may easily let it slide (assuming they even pay attention to the incident at all in the first place...) The other moderators might feel deterred to reverse such actions or reprimand the over-reaction, because they may feel that they will be stepping on toes and causing animosity among the moderators and admins.
Some moderators may go way out of line way too often, and they might get kicked out of the group, but there are always those who find the fine line between being able to abuse their power against people they don't like, but not do so in such an egregious manner as to get kicked out. They will usually be good friends with the other moderators and admins, so there will be a strong sense of camaraderie between them, and thus the other members will be willing to defend him against criticism as well.