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For failing app review? Apple would certainly be in the wrong for deleting Epic's accounts.

This was explicitly not a case of a failed app review. Epic rolled out their direct-purchase option with a server-side update (specifically to side-step Apple's rules), which falls afoul of Apple's developer agreement in two ways -- it would be classified as misrepresentation of the app as well as an attempt to mislead Apple during its app review. Apple reserves the right to block updates (which they haven't done _yet_, as Epic hasn't submitted any updates), delist the app (which they have done), remove the developer's account to block updates, and to blacklist the app entirely (eg: the app will stop working even if users already have it downloaded).