For years, BotCon and the Transformers Collectors' Club that run it have been encouraging a certain kind of fan. It's right in the name: collectors. People who want that rare item that can't just be picked up at Walmart. If you're coming to BotCon, you're sinking a lot of cash for some exclusives and the right to mingle with and buy from people who have rare stuff. If you're paying for the privilege of being a dealer, you want to be sure you can sell some very high margin stuff.
Thing is, eventually most of the potential buyers have their complete sets of mint in sealed box G1 toys, and have bought the Masterpiece stuff online. So what, other than the official exclusives, are available as rarities?
Third party toys, also known as gross violations of Hasbro's trademarks. Some try to be more subtle about it, but usually it's very clear you're buying someone else's version of Predaking or of Goldbug's faceplate or whatnot. They're very high margin, and it's easy enough for dealers to make pacts with the manufacturers to make certain variant color runs available only at conventions.
Unfortunately for BotCon, the legal halo of liability extends beyond the convention floor, and part of the price to be the official convention is that they have to play by the rules. Rules that Hasbro is unable to enforce at the manufacturing end, since the makers are often overseas or hidden behind enough layers of obfuscation as to not be worth the legal and PR hassles. So Hasbro banned sale of 3P stuff at BotCon a while back. The dealers just started having wink-and-nod hotel room sales of the same merchandise after hours. Now BotCon is apparently being required to police the official convention hotel as well, and I wouldn't be surprised if anyone wanting to be a vendor or attendee at BotCon would have to agree to be policed no matter where they're staying the night.
Will this kill BotCon in general? Probably not, but it could result in the license being taken away from the current holders and given to someone who can find a way to make a profit without having to choose between legality and money.
Letting vendors resume sales of illegal product at or near BotCon is not an option, and wouldn't save BotCon anyway, just slow the demise. If BotCon is to survive, they need to find a way to be something other than a means of producing low-run redecos and retools. Heck, I'd be fine with the TFCC continuing to produce the kits, but split BotCon off from it.