Hivewatchers can do whatever it wants, but if it's getting funds from the DHF then there needs to be some accountability in the way it runs. A proper "charter" and transparent processes would go a long way to avoiding conflict and misunderstandings. As you know, I've seen a few and they are nearly always ugly. We simply HAVE to get better at this.
My view is that HW has a role, but is currently over-reaching and is not geared up to scale at all. We need to come up with a framework for how HW is going to interact with communities and educate users rather than just default to using the ban-hammer and it's guilty-until-proven-innocent. HW is currently operating like a bit of a kangaroo court so it's no wonder there is growing backlash.