I think that what this whole thing goes to show is that arrogance is more punishable than past sexual deviancy. Parker mentioned it earlier but maybe it really is Arnold's opportunity to forgive people who did shameful things on their way to the top like he was rumored to have done. Sly too, Sly started out with that porn. As for why Dexter and Phil were denied, Dexter was arrogant after winning the Arnold Classic (in his interview with Arnold), and Phil is always arrogant on stage. Dexter was entirely humble on stage last night from all I can tell (his behavior stood out in contrast to Phil's last night for me) but he's apparently still having to pay for his non-PC answer to Arnold in the '08 interview. Champions are supposed to teach those watching the importance of hard work and dreams but Dexter took advantage of the opportunity to just make himself out as a genetically superior specimen, different from the masses.
This is why Kai, in his acceptance speech this year, honed in on Arnold and Sly's intended message and helped them relay it.
It's a shame bodybuilders don't have handlers to coach them on issues such as these. Movie stars and the like have people in place to help them out in this department. Bodybuilders usually have to figure it out on their own.