The only Magnemite exploit I remember was everyone trading for Magnemite so they could level the Join Avenue faster or something. I remember because I've used. Didn't even know it involved some form of hacking. Thought it was just people using a random Magnemite they had from gameplay (the one I sent was that)
It wasn't hacking-related. Magnemite was used because they were easy to find, just like with your experiences. The problem was that there were so many people doing it that it became hard to do any normal trades.
There were steps chosen in subsequent games regarding crowding of GTS resources, like an automatic block of all illegal Pokémon (which was still a problem, as some Legendary and Mythical Pokémon were available in the past at Level 1, like Regigigas), then later on, better searches that blocked ALL special Pokémon and searches with newest ones first instead of oldest.
Pokémon HOME just got an update that gives better searches still; now you can search for someone who wants a particular Pokémon species, which in turn will provide incentive for people to ask for reasonable stuff.
Hacking is a large part of the reason behind why seemingly everyone demands a Level 100 Mewtwo and nothing less: there are some hackers who DO give out these Legendary Pokémon,
pro bono, and they spend their days fulfilling these trades. It gives people the wrong impression of what constitutes a reasonable trade, especially since many of these people putting up some common Pokémon and asking for Legendary Pokémon at Level 100 are little kids, who don't yet understand how to see things from someone else's perspective. They see the GTS as a machine where you put in a Pokémon, ask for something, and a while later, your request is granted, so for them, why NOT put in the biggest, baddest thing they can imagine?
