I think they had a few fishy subdomains. That guy is not bright though, he threatened to pull Adsense banners unless G restored his site. (still on cached version) "Note: If in a few days phpnuke.org isn't re-added to google's search engine I'll publish here any action I'll take against this, including (but not limited to) the AdSense banners removal from all my sites. Thanks for your support."
If I was a G engineer, I wouldn't have re-included it.
Actually I posted on this yesterday but the thread never made it- not sure why. I thought it was interesting that wordpress was completely gone from G -no listing at all, and now that they removed the offensive content they are back in G. I've never seen a site return from the ashes so quickly.