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No accounts are blocked. The accounts will still work fine on Steem (in fact also on Hive). Hive invites supporters of a decentralized blockchain who fought (unsuccessfully) to decentralize Steem and keep it decentralized, and honors them with an airdrop equal to their Steem holdings.

Yes very true. It is completely decided through a script which ran an objective comparison and came up with the result based on the ruleset.

And who set the rule? The rule itself is very subjective, as @lukestroke also wrote.

you guys just let an algorithm decide?

people who had no idea what was happening with the hard fork are included in being excluded, did your algorithm know who these people were? Prolly not