Hi Robert,
I think it needs to be blocked with auDA. They are the ones who are double-dipping on the registration fees.
Example:
Say the drop services removed these from their list. Within a short amount of time, a new domainer will come and hand-reg the domain with another registrar. It will be dropped, auDA will get their fees again and so it will continue. It needs to be blocked from all registrars, not just the drop service.
I can see your point that it has to start somewhere, and I guess the drop service would be first port of call as these domains stand out and are sometimes too tempting not to bid on. However auDA maintain the misspellings list and should block these at the source from being registered as they will never pass the auDA policy while the name is still on the list. Its entrapment and if I was a lawyer would probably find a legal issue with it. If you are taking money from someone knowing they are not in policy, its at least not ethical.