When was that decided?
I think the better question is, when was it ever considered village/organization property since the fall of the last Biju Council?
The responsibilities, rewards, and punishments have been very player-player. When the player messes up, he/she gets stripped, not the village. When a biju is fought for it is the player who wins it, not the village. When he/she breaks the rules, it is not the village that takes them to bat over that (hell, occasionally the village was in full cahoots with the violations). It was the community that discussed it, the community that had to put up with the heat and tension, the community that was heavily involved in all things biju (and other rules)
The community in the past discussed strippings, discussed rules, etc. The community, even now, is making up the rules and stuff. The Council is being picked from the community ass a whole, not as representatives from the villages/organizations.
... The interpretation of words is just as important, more so in fact, than the words themselves Eric. If I can read what you said and take that meaning, that inference away from them, then they didn't state your intentions clearly enough.
To me it looks like that is exactly what you propose, to...not deal with the problem makers individually but to punish all based on those who made the infraction.
What you're taking from it is that this is a "punishment" for all clans/villages/organizations, and if you want to take it that way, then you can (much like how a vaccine can be considered a punishment for other people not being able to prevent the spread of disease).
The main goal is not to punish, but to solve a problem before it becomes a problem (again), to nip it in the bud if you will.
Interpretation is not really a huge issue to me at this point in my post, because regardless of whether it's seen as a punishment for everyone, a flower bud nipping measure, or a condom in heated times, the point is, the Council being given the tailed beast from the get-go is much simpler and faster than handing it to the clan/organization.