You may be quite surprised to learn, this is actually very close to how things work right now. And has been the case, informally, for quite some time.

When abil_uk was banned, after repeated warnings, he appealed to Council. The matter was discussed between Council, moderators, and Reggie, both before and after the ban, and again before and after his appeal. His ban was actually lessened as a result (the first time or two).

And yes... All such things are reviewed. The only difference is that often things are reviewed after the fact, instead of before it happens. That can lead to unfortunate results at times, some of which can't always be undone.

Is there room for improvement? Of course. Should be punish and ban a moderator for making a reasonable mistake, after years of positive and reasonable moderation? No. But some people get too caught up in it, and see it as everyone attacking them.