I think this would only result in more pain. We'd basically be telling people:
Because you failed x out of n audits, every review you've ever made is bad
That could conceivably be the case in some instances, but weigh the hassle of reviewing every single action the user took against the hassle of some posts that were inaccurately reviewed. It seems like such an egregious waste of time. What reviews should they retain credit for in order to keep progressing toward the badge?
Remember, the point of suspending a user (from certain areas of the site, or the site entirely) is to give them the opportunity to improve and then welcome them back when they're able to contribute positively.
I tend to agree that someone who is permanently barred from reviewing most likely didn't really earn the badges it rewards. However, removing the badge is getting a little to close to punishing a user instead of simply preventing them from repeating problematic behavior. Even lengthy suspensions aren't designed to punish you, they're designed to keep you from punishing everyone else. We've managed to retain a model of rewarding the behavior that we want, and I'm not in favor of stepping back from that.
On the other hand ....
This is becoming an extremely large source of contention, and I realize that it isn't fair to the people that work really hard to earn the badge honestly. I'm a moderator, I typically take action on between 100 - 150 extremely smelly posts every day. There's nothing glorious about it. Properly reviewing posts can be extremely mentally taxing.
Instead of yanking badges, let's make them harder only for people gaming the system to earn. Add a criteria that you must complete the tasks while passing 95% of the audits presented to you. If you pass 1k reviews and failed more than 5% of the audits, you've just put the badge permanently out of reach. In other words, nobody did this to you, you did it to yourself.
Doing this, we do more to prevent the problem, which I believe is more in keeping with our philosophy.