It is as well to recognise that US visa law was probably violated. It may not seem a big deal in India to fudge a visa application form (or so many sworn affidavits in Indian courts would not be full of lies), but the minimum penalty in the US is 10 years in jail. The second charge is violation of minimum wage laws. This too may not seem a big deal in India, where such violations are an everyday reality, but the penalties in the US are stiff. In short, there almost certainly were grounds for taking action. However, the sympathy expressed by some for the diplomat's maid is misplaced; she was paid what she was promised when she was hired, and the sum was vastly more than any domestic help in India can ordinarily hope to get - which is why she took the offer.
The complaint, legitimate, is about the manner in which action was taken, ignoring better ways in which the matter should have been settled between friendly countries. Since the secretary of state has expressed his regret, the chapter should be closed if - and this will be a test of how important the US considers India to be - the diplomat is either allowed to be accredited to the United Nations in New York, with full diplomatic immunity, or sent back home. Meanwhile, we can do better than have a former external affairs minister demand that gay partners of US diplomats in India be arrested (presumably after spying on what is going on in their bedrooms), or have an obnoxious TV anchor declare on prime time that Americans are the world's biggest racists (Indians could claim that title too).
Diplomatic practice needs review. Under reciprocity, you allow the other country what it allows you. Alternatively, all diplomatic offices in New Delhi get the same treatment. Both kinds of parity are routinely ignored, often with good reason. Under reciprocity, the US would not be allowed more diplomats in India than the number of Indian diplomats in the US. Ignoring this is common sense, or India's relations with the most important countries would suffer (it is not their fault that India has one of the world's smallest diplomatic corps). Less defensible is India's reluctance to insist on reciprocity when it comes to visas for people who are unlikely to overstay. Some return toughness would make things easier for Indians who have to travel often. Meanwhile, the US request for closing the road behind its embassy had been rejected by every ministry and office, but cleared by the then Lt Governor of Delhi. Israel had requested similarly that the stretch of the arterial road in front of its embassy be closed to traffic, but was (fortunately) turned down. One problem is that too many Indian officials seek personal favours from the West; a former foreign secretary was given a post-retirement job in an American university, but his salary was paid by the state department. Now, why would they do that?