Could this have been handled without issuing a ban?
In short, yes. But, should it have been?
Per our forum rules, profanity is deleted and, in extreme cases, the user receives warnings or cumulative infractions which then trigger repercussions for the account. Publicly discussing a moderator action also yields these actions.
It sounds like your moderator followed forum guidelines. The user violated the rules by posting profanity. The moderator took the action of deleting that profanity by removing the post entirely. This is not an unreasonable course of action on a web forum. In fact, if the forum does not have a way of publicly showing that a post has been modified by someone other than the author, I believe this is preferable. Otherwise, any moderator could change any message and none of the users would know.
A user posts a message that includes some profanity.
The way this is described does not sound like an "extreme case", thus the user isn't warned. Again, per forum rules. When the user reposts the message, he has taken strikes two and three (more profanity and violating the rule of publicly discussing moderation actions). The cycle continues, leading to at least one violation per repost. At some point in this cycle, I'd assume that "extreme" was crossed and a warning should have been issued. A common sense approach to this would be perhaps the third round of post removals.
From all of this, it sounds like the one step your moderator missed was issuing a warning to the user at some point in the cycle. The ban itself, though, seems entirely justified by your forum guidelines.
Something you may wish to consider in this instance is: What is the expected outcome of the ban? Is it slamming the door in the user's face and telling them to go find somewhere else to hang out? Or is it simply a cooling down period (for both sides) where the user will be welcomed back in X period of time? If it is the former, then I believe the missed warning by the moderator should be corrected and communicated to the community that policy will be followed. If the ban is designed as a cooling off period, then the missed warning is minor and though it was warranted, not a large problem. The user can return and someone (either the moderator that missed the step, or another) should at least explain to the user how the step was missed. This also makes a perfect time to explain how to legitimately raise a complaint about moderator behavior, without violating forum rules.