It's not bad reasoning. Allying is an innocent feature to most people and if they're not aware of the fact that they can teleport inside of their base then that's a pretty rough punishment just for allying someone. They can change the permission but I played up to rank Cook and no one ever told...
It can easily scare away people who do not have a full understanding of how factions work and get raided like this guy. It's your server, I don't care if you keep it that way but personally I would change it so you'd manually have to enable it.
"with their friend's life on the line"
Right. You don't die from a bit of weight on your body. I'm sure if http://static.goal.com/303500/303549.jpg this doesn't kill them that a couch wont kill you either.
Mods can hide information from the F3 interface making a screenshot of it unreliable. They could check your .minecraft folder and look for any mods but I'm pretty sure it's too late for that and that you could've just removed the mods before uploading it.
You have an unraidable (auto)farm that can produce drugs more drugs than average player since there will be someone there most of the time. You also have higher drug sell rates and can store valuables there that we could have raided otherwise.
It would be fair to give it to them, even if they don't need it. They pay for the ranks just like drug ranks. They could build multiple vaults, sethome at their f home which is only for trusted members or at a mob grinder.