Well, after about roughly five hours of downtime, the illegal PvP Epic gear has vanished. No word on the Email situation except for the up to a few days server message of last night. Blizz also sent out emails to let us know our email is jacked up.
The good news is that Blizzard can track items obtained illegally, by glitch or bug. This will help me sleep better today.
I don't think banning everyone who did it would be the right choice for 2 reasons. It was Blizzard's mistake, and they obviously can identify all the illegally obtained items through their database system. Nice going on that fix Blizz...
I would still bet there might be some job openings at Blizzard today, so check your local listings.
Edit: The Email was returned the following day at about noon. I am pretty sure I got all of my stuff back.