Does Google have a public API that checks if a site is banned from AdSense, or does the owner of isbanned.com have a proprietary feed of some sort?
It's possible they simply use the google search api and search for: site:domain.com and if there is no result returned it says the domain is banned. As for the adsense ban check I don't know how it is done but there is another tool which can show what adsense ads will be shown for a given url: http://www.labnol.org/google-adsense-sandbox/
I think I've figured it out. They autogenerate a fake site with a random AdSense account number (that they've probably harvested on the web). If that site does not generate an ad feed from Google, they consider it banned.
That seems to be correct Which means they can only determine your Adsense account's availability, not if your site is banned or not. @wptheme
No. They check a domain against an AdSense account in good standing, thus verifying whether the domain itself is allowed to be used with other AdSense accounts in good standing. If your AdSense account is banned to begin with, there is no need to test it against any domains.