Apparently the ships can be self-destructed, and when they explode, they do AOE damage. So a ton of Goons went to a densely populated area and just kept self-destructing their ships over and over again, killing people with the AOE damage. Then, because there is absolutely no death penalty at all, they could just respawn, and do it again. Over, and over, and over again.
Then later they discovered that you could invite enemies to come to your bridge, and then shoot them. So they got 30 - 40 Goons together on one bridge, and just kept inviting people to board the ship. Then all of the Goons would shoot them at once, killing them instantly. And when they respawned, they would respawn in the exact same place. So they would be killed again. And they would be stuck there, dying every time they respawned, without ever being able to reach the door to leave the ship.
The griefing itself is funny, but not that funny. What really makes this awesome is how everyone blew it way out of proportion, and starting demanding that all Goons be banned for killing them a few times in the game. Why don't people like that just stick to single player games?