They should ban it until it's been sorted out. The last thing you want at 39,000 feet is a cabin full of toxic smoke from Li-on battery.
Too late. There's been plenty of incidents like that from drone batteries, game machine batteries, etc. All were legal to carry on, too, since they were rated 100 Watt Hours or less. (The Samsung Note 7 battery is only about 18 Watt Hours.)
A handheld battery problem in the cabin itself, has actually turned out to be not so bad. Attendants are now trained and have proven to be pretty good at putting out such fires. For example, on this KLM flight:
But there's also been plenty of times that the final walk around of the aircraft has found smoking checked luggage because of people illegally packing batteries, and devices with batteries. It can take just minutes for batteries in a hold to burn through flight controls.
It's only by sheer luck so far that we haven't had a passenger liner brought down from such checked luggage in the hold. (At least one cargo plane carrying batteries did crash and kill its crew. They had less than three minutes from noticing the fire to the crash.)
In short, I'd much rather someone was allowed to bring their device into the cabin, where a fire can be immediately noticed and handled, than for them to feel like they have to hide it in their checked luggage, where there's no way to save the plane and everyone in it.