As far as I know you can't use adsense on error pages.?? [please confirm this] When a subdomain gets closed they put up an error page... with only adsense on it. try any subdomain.. here's one I just made up http://fhbgfghhghg.moonfruit.com here's another http://could-be-a-dead-subdomain.moonfruit.com This is abuse of adsense TOS, right?
Chances are, though, they won't get banned. They're probably making a crap load of money off of it and Google is probably making a crap load of money off of it, so why bother banning them?
they don't just ban you for any violation. at the very worst they will tell you to remove the ad or the site will be banned or they'll ban the site untill it is removed. i think google might be more concerned about the ads being on a free hosting site then a 404 page.