It's a question that her freely expressed opinions/attitude were in opposition with the moral ideals and the spririt of the modern Olympic movement as set out by de Coubertin, and the Olympic athletes are expected by the olympic committee to uphold these ideals. She has a right to her opinions, but such opinions, expressed publicly (when it's private it's more between you and your conscience) are just not acceptable for an olympic athlete. The punishment in her case seems harsh, but the decision of Greece (it's OC) can be defended.

Representing your country at the Olympics is a privilege, not a right. Making xenophobic jokes on Twitter was stupid (especially one where she implies she wished the Nile disease on north-african immigrants), and it made her an embarassment to the country she was to represent, and her timing was especially bad as it left no time for her to make amend and for the whole affair to be forgotten. It's not 1936 anymore.