Not everyone knows about the squelch, many have posted there are not enough slots for the guys they want/need to squelch (a big red flagg there that there may be a bigger issue going on in the arenas than believed)
Which is why I said a more robust chat interface could solve the issue, not "what we have now allows it".
If people are not punished/informed that they are of of order how will they learn? I know its not our place to teach them and its there parents, but in a lot of cases their parents dont play the game.
It's not just the arenas, it's the internet at large. If you want to see a good example of it, take a look at Youtube comments.
Good luck getting people to conform to your definition of "behaving" on the internet.
Now, you can endeavour to police your arena, or alternately, you could give your users the ability to control what they see. I know what makes more sense to me.
Wiley.