They really need to permit actual taunts in Quickplay. Though they had good intentions by disabling them, they ended up creating a worse situation. Teabagging just seems to infuriate and get under the skin of a lot more players than any taunt ever could. The decision is made more baffling as they are enabled in Battle Arenas.
An opponent using an actual taunt doesn't generally bother me at all. The developers took the time to craft those animations and, I think this is the important part, the taunt says more about the character than the player. If Bowser lets out a roar when taking a stock, that is something you could easily see Bowser doing. If Captain Falcon says "show me your moves," you can believe that the character wants to see your moves. So to me, taunting is about the character, not the player. Furthermore, taunts can be used to express more than just beating your opponent. I love using K. Rool's sumo pose at the beginning of or during a match as a sort of challenge, ala Morpheus in the Matrix.
The only time actual taunts become frustrating for me is when things turn into a taunt party (the reason they were turned off to begin with). When I open my FFA Battle Arena, it become really old, really fast when a taunt party erupts.
Teabagging on the other hand is all about the player. No one celebrates anything by repeatedly crouching (and frankly as you get older your knees likely couldn't take it). Therefore, the act of teabagging is inconsistent with the characters in the game and it separates the player from the character they are using. In a manner of speaking, you sort of see behind the curtain at the person pulling the strings. And, for as long as it has existed, it has been synonymous with disrespect. Let's face it, you don't ever imply you're putting your metaphorical/digital balls in someone's face against their will as a sign of respect (and it could be a crime if you actually did it to someone in real life).
As for "taunting a taunter," can't say I've ever found a good solution. I wish I could say I rise above it and just play as I would any other opponent, but there are times when it gets under my skin. Over time, I've gotten better about just letting it go and, while it still gives me a pinch of salt, just playing the game. The reward for winning then becomes all the sweeter.
That being said, I can be fairly rigid when enforcing no teabagging in my Battle Arenas. Not because it gets me salty, but rather it tends to drive away other players. Not long ago I had a fairly decent Bowser player (I see more teabagging from Bowser players for some reason) dominating my arena. After each and every stock or just even knocking an opponent off the edge, he'd start teabagging as though his thumb was having a seizure. I noted that when he was in the arena, people would tend to leave after only a match or two, whereas before it was pretty crowded. Obviously I can't ever be sure of whey people left, but I believe it was due to the teabagging as things improved once he was kicked (and kicked again, and again....). These days I will kick any undue teabagging pretty quick just so my arena stays active. Also, you can taunt in Arenas, so there isn't any reason to teabag beyond pure disrespect.