The reasoning is that one year bans achieve as much as a permanent ban does without being as harsh on the player. I'm sure after one year, the player will have made a new account and see how bad toxicity is.
My reasoning behind this is that if they are banned permanently, they just make a new account and they learn nothing at all, they just keep being toxic and they won't care if they get permanently banned. However, if an account is unbanned after a year, it has a higher chance for the player to be a repeat offender, because after a year, they get something back from them that actually has value, and they will think, "I don't want to lose my account again, I should generally be more nice", instead of "I got permanently banned again, looks like I'll just make a new account and change nothing about myself." Permanent bans only have an effect the first time around, but it won't stop the toxicity that gets cycled within league of legends. Tyler1 was a prime example of this, being permanently banned 17 times and it didn't change him at all. The only way he changed was when he was promised to be unbanned again, and realizing he didn't want to lose something so valuable again, has not broken any rules since then.
Accounts are also very valuable; they might have tons of legacy skins and a lot of money on those accounts that can not ever be regained. To take that away forever is kind of a harsh punishment. Besides, people deserve second chances in life; if you broke a vase with a baseball once, wouldn't you say it would be unfair if your mom never let you play baseball again? There is a 14 day ban you have to go through first to prevent this, but in my opinion, the final bomb dropped should not be permanent, but something less harsh like one year, otherwise no lesson is learned and the cycle is continued.
TL;DR: Permanent bans are not as effective as 1 year bans, and they are too harsh.
EDIT: Poll should say one year haha