Well, some people may be asking things like:
"Why bother with cheating? There are no prizes at all, we just do it for fun and if someone is cheating he/she is just wasting time in a very pointless way?"
There is some truth in statements like this, but let's face it, we all like SPOJ's ranking system and it is one of the reasons, for me at last, to keep solving problems. There is a sense of achievement when we go up a little bit in the ranks after an acceptance, or when we submit the best solution for a problem (even if it is not a challenge problem). It is difficult to explain this to some people, but if you are reading this post you probably agree with me.
There is also a "patriotic" pride when we help our country to go up in the countries rank, specially when you want to stimulate other people to study algorithms (as in my case, because I'm a CS teacher) and your country has no tradition in programming (I'm from Brazil).
The problem with cheating is that it really makes things look pointless. Our little "abstract" sense of achievemente becomes even more abstract, because the same thing that we got from struggling is obtained by others with no efforts.
Most people that complained about the Brazillian guy that cheated are from Brazil, and they, alas we, were dismayed because he messed up our local rank an the countries rank. Suddenly, the whole thing seemed very meaningless. The effect in the global rank is not that significant, but try to imagine what it would be like if the top ranker was a cheater, or if there were lots of cheaters in the top 50.
Some people may be thinking now "If you feel this annoyed why don't you just quit?". Well, I lost my impulse in SPOJ when the cheating came up in a newsgroup of brazillian SPOJ members. Some people felt just like me. I don't think that problems like this should be ignored.
But I don't think this is an unsolvable problem. I recovered my impulse when the supposed cheater changed his name and country. I think he recognized that his acts were the results of poor judgement. This kind of cheating will happen again in rare ocasions, but a little talk with the administrators or something like that will (probably) get things straight. A per-problem elimination of dishonest solutions may set things right. But there must be a way to detect cheating before the number of bad submissions gets too high.
A curious way to facilitate the correction of cheating is to allow users to disqualify their own solutions if they think they are dishonest. I think that neophd himself would do something like that if he had the opportunity.