The point about crazies is that they're crazy. They want attention, and a warning counts as attention. I'd guess that anyone who gets a warning is most likely to respond by posting endless screeds about how persecuted they are.

So for the occasional crazies a public reprimand might temporarily decrease the signal to noise ratio, and will probably lead on to step 2 anyway. So I suspect step 1 is redundant in practice.

The only real reason for banning people is if their idea of debate is an endless stream of ad hominems and very little else. I don't much care what people believe as long as they can produce a coherent more or less reality-based argument to support their beliefs, and can express it without attacking anyone personally.

No one should be banned for believing the wrong things - only for not debating with civility.