There actually is a well defined demarcation point where the site owners wishes do apply. It's called... A demarc point! Everything that happens past this point is by definition entirely in the control of the admin. Which includes closing the door on whoever they wish. This is a technical reality, not something you can effect with opinions or wanting things more than other people want other things. It might seem contradictory but this is actually the main thing that makes the internet as free as it is.

When we're talking about ethics, I think we should give the owner more than that. If they don't want to be DDoSed we shouldn't say "too bad, the attackers are outside your network, your wishes don't apply, get good".