There's an interesting argument to be made that by embracing the cheating market wholesale, it divides the cheating community into separate units. Those that are happy to exploit games publicly and share code, versus those that would prefer to hide and benefit from it financially or otherwise.
In that sense, encouraging people to come forward with hacking tools means that you'll have a stronger awareness of how they're used. Then if you were to leave the less destructive methods of hacking alone, you could design your detection methods to explicitly examine those avenues of exploitation and maintain a clean separation of people who use outside tools and those who do not.
It's an attempt to combat the constant arms race of hacking by deflating it a bit.
In that sense, encouraging people to come forward with hacking tools means that you'll have a stronger awareness of how they're used. Then if you were to leave the less destructive methods of hacking alone, you could design your detection methods to explicitly examine those avenues of exploitation and maintain a clean separation of people who use outside tools and those who do not.
It's an attempt to combat the constant arms race of hacking by deflating it a bit.