Reid is now re-registered as a loan player and half the fine will be suspended for five years if East Coast previously caught for similar infractions in 1998 and 2004 do not breech regulations again.
Horowhenua Kapiti, tied with Wanganui on six points, did not receive any advantage from the penalties.
"I thought that was a bit harsh. Horowhenua Kapiti only lost by a point," said Hoskin.
"Technically it's good [for us] but if you're in Horowhenua, wouldn't you be pissed off?"
To Hoskin's mind, more than three loan and origin players per team dilutes what Heartland rugby should be.
"I think that's a real slap in the face for your local players."
Much criticism was made over the lack of depth in key areas of Wanganui selections this season.
But from the early days of his tenure, Hoskin stuck to his guns by telling representative fringe players in the Manawatu region who expressed an interest in Heartland duties they had to come play for a local club.
Only centre Jason Temara (import) and flanker Doug Horrocks (origin) are with his squad of locals.
"It's easy to go and get guys from Taranaki and Manawatu, but it doesn't solve your [depth] problem," said Hoskin.
"I may be proven wrong wrong with this, but that is my personal opinion."
The depth will be tested again in Gisborne with injured skipper Peter Rowe still out.
Also, soldier Sonny Woodmass is required for New Zealand Army exercises, so Andrew Evans will switch to lock to partner Nick Cranston both Evans and Cranston having quiet training this week to get over their niggles.
After dynamic games in Wanganui's second half comeback against South Canterbury, both No8 Lasa Ulukuta and halfback Lindsay Horrocks come into the starting XV.
Hoskin said Jason Hughes moving to blindside flanker to cover Evans' switch leaves them with a loosie combination in Hughes, Ulukuta, and Doug Horrocks that worked well in the second half fightback at Cooks Gardens.
"If you get an opportunity and you want it bad enough, here it is."
Karl Parker gets another chance at hooker after injury to Roman Tutauha, while coming onto the bench are prop Lucas Puts and lock Simon Hillis, who had a brilliant game for Wanganui Development against Waiarapa Bush B last weekend.
Poverty Bay have never beaten Wanganui in the Heartland competition and have so far given up four-try bonus points in away losses to Mid Canterbury (31-12) and West Coast (30-14), while being beaten at home by Thames Valley (27-18).
However, they have experienced players like NZ Heartland No8 Sione Ngatu (108 games) and lock Murray Hewson (60 caps), so with a Meads Cup semifinal appearance still hanging by a thread, Hoskin is under no illusions.
"We're below mid table, beaten twice, then got home by a point we need to step up our game.
"They're just not going to roll over and die for us. Now it's come together and it's time to go."
The team flies to Gisborne this afternoon.
Kickoff on Saturday is 2.30pm.
