Why is blacklisting causing a riot?

Because people are normally angry about others criteria for blacklisting others.

EDIT: If you ment to want to know what it is its banning a user from entering your giveaways.

To be honest, I don't think it is bad. It's another tool. Just like any other tool, it can be used in ways that some people don't agree with. I use mine for rule breakers, very rude people, and those that, in general, I don't want entering my GA's. It's a relatively small list of about 100, especially compared with the 10's of thousands of other users here they can get something from. If other''s don't wish to use this feature, all the power to them.

Because a lot of people blacklist semi randomly. I guess the initial idea of blacklisting had its advantages, but a lot of people are going crazy about it, blacklisting people because they say thank for a giveaway, and stuff like that, just because it doesn't fit with their twisted vision of being grateful, for example.

It's also like contributor values too: at first they make sense so people don't abuse too much, but they're also quite far from the original spirit of the site, which is to give away. So I can definitely understand why some people would be frustrated.

because people want to leech and when they can't they get angry.

Welcome to SG!

I suggest reading this topic: http://www.steamgifts.com/discussion/b4uxd/blacklists-sgtools-lots-of-demands-oh-my
It's very recent and with plenty of contributions, it should help.

well because no one like the feeling he aint welcome...

but i think people are more concerned about "why" they been blacklisted instead of just been blacklisted ^_^

Blacklisting is bad for those who are blacklisted because it prevents them from entering giveaways.
Don't pay attention to all the drama about it, if you don't want to give games to someone for whatever reason don't feel bad about hitting the blacklist button. Enjoy your stay, hope your winners won't give you trouble.