I can’t speak directly for GoDaddy, but if their system is anything like ours, when a domain is suspended, said domain becomes locked and cannot be edited.
While I completely see your point, I believe that GoDaddy is acting properly, considering the domains were probably purchased fraudulently. My thought is that the domains are being held at least until they can evaluate the nature of the purchase and ensure the validity of the domains (it sounds like they are not at all valid).
In addition, the domain registration information may hold details that are being used in a fraud investigation and, therefore, cannot be deleted.

I hate to say it, but you may very well just have to wait until 2012 to get those domains, but it would behoove you to keep checking on the status, just in case.

After sending them some letters, they went out of business and disappeared.

I contacted Go Daddy to report that the Whois phone number was disconectd, e-mail sent to e-mail address listed in Whois bounced, and that registered mail sent to the address in Whois was returned as undeliverable.

We received a reply from Go Daddy that they were suspending the domains and if the Whois information was not updated in a brief time, the domain would be canceled.

We waited 60 days, and contacted Go Daddy again. They said they would not cancel the domains. They would only suspend them until they expire in 2012.

It was pointed out that this is against ICANN rules and their own registration agreements. They again replied that they will not cancel these domains and only suspend them until they expire in 2012.

This means that the person who registered them can enter new Whois information and reactivate these domains at any time.

How is this a punishment?

How can Go Daddy get away with not canceling these domains?

How many hundreds or even thousands of domains with inaccurate Whois information are being held by Go Daddy as suspended but not canceled?

Is there anything that can be done to force Go Daddy to cancel these domains?

Telling them I would file a formal complaint with ICANN was ignored.

It seems as though the “Whois Police” turn a blind eye to even the most blatant disregard of ICANN rule 3.7.7.2:

“A Registered Name Holder’s willful provision of inaccurate or unreliable information, its willful failure promptly to update information provided to Registrar, or its failure to respond for over fifteen calendar days to inquiries by Registrar concerning the accuracy of contact details associated with the Registered Name Holder’s registration shall constitute a material breach of the Registered Name Holder-registrar contract and be a basis for cancellation of the Registered Name registration.”

If you need your details protected, you would need to contact your registrar to inquire about ID protection services.