What Justin Sun did that was completely wrong, is he got Ned's stake stated he was ultimate ruler of Steem.

On a platform that was sold as being decentralized, this went against everything Steem.
That Mr. Sun didn't realize this was a grave error.

That Ned sold all these tokens after his promises meant:

• Ned hated Steem (the community)
• Ned needed money and didn't care
• This was always the plan to sell out Steem to make sure censorship free platforms don't truly exist.

And Justin came in and pissed everyone off from the word go.
Of course, the Witness' response was a poor thing to do without further discussion... however, if they didn't, then no further discussion would have taken place. Sun is the new emperor.

The problem is, as you have alluded to here:

• Did Justin know before he bought?
• Did Ned have ulterior motives before he sold?

The answer to both is yes... unless we take both of them to be unknowing shysters.