The idea behind cheat detection sounds great -- if you notice someone using a cheat, then kick them out of the game. The problem lies in that there is no generic, reliable way to distinguish between a piece of cheat software and another normal piece of software. Because of this, cheat detection software is forced to look for specific cheats. The cheat detection software stands guard over your server, looking for specific cheats. When it finds one, it can kick the player using it.
The problem with looking for specific cheats is that it is easy for cheat makers to modify their cheats and make them look different. Also, there is a lot of information available on how to make your own cheat, so new cheats are made frequently. To combat this problem, cheat detection software created a way to update its list of known cheats. When a cheat is released to the general public, it is added to the list of cheats to look for. Now the cheat detection software stands guard over your server with its constantly updated list of cheats. When it finds one, it can kick the player using it.
As it turns out, this is not a very good method. In fact, cheat detection is so unreliable that it needs to something else to make up for this -- punishment. Punishment usually takes the form of banning someone from the server. The idea behind punishment is that even though you cannot catch all cheaters, you can at least keep people who have cheated in the past off of the server. It also discourages people from trying cheating. Now the cheat detection software stands guard over your server with its list of cheats and its list of cheaters who are not allowed to play on this particular server. When it finds a player who is using a cheat or who has used a cheat in the past, it kicks that player.
You would think this would work, but as it turns out, it is not very effective. The problem is that if you ban someone from one server, they just go play on another one. There are currently several global cheater databases running, one of these is even integrated into cheat detection software. However this raises many questions about the legitimacy and maintenance of such a database. How long do people stay in the database? What happens if someone is placed in the database, but didn't cheat? What happens if your children or friends try out a cheat on your computer without your permission? What if a bug in the cheat detection software causes a false detection? What if one server wants someone banned, but another server doesn't? Who will judge all these matters?
All of these questions raise serious doubts about both the fairness and the functionality of such a database of cheaters, the scope for error is great, as is the amount of maintenance required. All this work is required to patch up the failures of the flawed concept of cheat detection.