The court depends on the Jurisdiction and where the plaintiff choses the venue. The defendant could get his straw man attacked in his native/current KR jurisdiction OR in the plaintiffs native/current jurisdiction, either way, Fraud is Fraud, theft is theft. The DOA hack not being theft isn't an argument. An argument is simply if a is b and b is c then a is always c, a proposition followed by other supportive propositions leading to a conclusion, not just a proposition, not only an assertion. In terms of ownership it doesn't matter that the keys were in the car, it doesn't matter how the founds were compromised, because theft is INTENTION and PRODUCTS/ACTS.
ETC does not have an argument, they have a marginal and dare I say fringe opinion at most on why a HF should or shouldn't happen, or as you put it "if it was theft it wasn't worth prosecuting", which is embarrassingly only support of the theft, nothing more, no reasoning or explanation could ever manifest for "not worth prosecuting".
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I think the argument for ETC is pretty simple. The hacker followed the rules. You don't reverse immutability on the main chain because someone fucked up a custom smart contract.
The same logic applies to privacy. You don't take away privacy because a small minority of people are going to use that privacy to break the law. The problems created by taking away privacy are far bigger than the ones that exist. Sometimes doing nothing is the smartest course of action.
That being said I think I would have been on team Ethereum over ETC if I had been around when it happened. Community consensus is the new law. We're forging the ability to bend or break the law for relevant exceptions. A middle ground needs to be forged because both sides of the spectrum have serious consequences.