Seems odd to me to be able to be reported for doing something which is considered a feature of the system though. I mean if leeching was deemed wrong, would it not just be easier to prevent it in the first place ?
The EULA covers no hacking / botting / or abusing exploits very clearly though.
Its for random PVPs, where people can simply enter a match and stand there doing nothing while the rest of the team are disadvantaged from having a leecher.
There are LOTS of leech bots also present in GW1, account macroed to simply enter battles and do nothing else but leech, its pretty unpreventable to stop people from entering matches and doing nothing.
Also if you rage quit from a PVP match more than twice, that also gets you dishonourable. This was a problem in GW1 because people wold constantly rage quit if they didnt have a monk (no dedicated healer, OMG /quit). Pretty much everyone used to do it, even me, making random PVP completely unplayable, or when you got a group with a monk, you would simply win through all the opposing team leaving.
It was pretty terrible tbh, so they added in a /report system to report leechers and botters.
In GW2 there will still be leeching and botting. As you suggest, there will probably be hundreds of accounts being set up to whack n tag monsters in popular areas to pick up loot using a macro bot, this is pretty much unpreventable in a game like this, unless Anet can somehow come up with a way to prevent it. Even if a player isnt actually using a bot account, and they are whacking and tagging lots of mobs in this kind of system, that would set of alarms to all people playing around them that this is a bot account, and they would get reported eventually via email anyway. /Report just makes reporting bots and leechers easier and faster without having to screenshot and email CS.
GW used to be a heaven for bots and leechers before they added the report system.