"we want ... to keep Wikipedia out of aspects of the lives of people that are nothing like encyclopedic, and can cause potential defamation issues. "
That only sounds good until one analyses it.
I think most of us just want to keep Wikipedia away from unsourced negative material about living people, and possibly some of us also want to keep away from even sourced material not relevant to notability, & derogatory in a serious way to people the intimate details of whose lives are not a matter of public concern.
That's a much narrower restriction than what you said, and much more compatible with NPOV, and with the actual wording of BLP.
And anything and everything dealing with living people is potentially defamatory if for reasons right or wrong they don't like what is being said. I think most of us would think it more compatible with NPOV to keep out only what can plausibly be considered as actually libelous, again a much narrower restriction.
This illustrates what arbcom did wrong: they legislated that anyone with a more broadly restrictive view can impose it. Possibly some of them may have actually known what they were doing, and specifically tried to impose their minority view.