Well, there is no "right" that you can have your gamertag be your name no matter how offensive your name may be to someone. Now then, I don't think this guy's name is offensive personally, but some peoples' names would clearly be offensive to some and thus any/all names that players deem offensive must be taken care of by MS with a ban like they have done here. They have no choice. If a certain number of community members on XBL report it as offensive, well, MS policy dictates it must be changed.
I have friends who have the most non-offensive GT's out there who send messages to me and other friends to report their GT so they can change it and it works every time. It's the way the system works. Your GT could be ABC123 and if you have a number of people report it then it will get banned, too.
This Richard Gaywood may really be his name but unfortunately he must accept the fact that this could have, and did, happen. Too bad. Deal with it. It's nothing personal by MS, but it's the XBL community. MS can't make exceptions or else there's no point to the system at all. As the saying goes.... "That's just the way it is......"
Again, deal with it. Call the waaambulance. And X-S, drop this stupid topic as news already. I, for one, am tired of it.