At this point, it's not the alignment's fault. It's the roleplayer's. Banning an alignment will not stop a dick from being a dick. The DM should just say "Chaotic Evil? Go for it, just don't ruin the experience for everyone." And hey, if he is able to find reasons to work hand in hand with the party and be an asset while maintaining his alignment, great. Everyone's happy. If he ruins it for everyone, don't invite him to the next campaign. Problem solved. Banning alignments is a very roundabout, inefficient way of the DM basically saying "Hey, no one ruin the campaign for anyone else."

For example, one of my characters is Chaotic Neutral, although a strong argument could be made for him to be Chaotic Evil. Long story short, he has a tragic background that resulted in him becoming strong by overcoming it. He develops the belief that overcoming tragedy is the only way to become truly strong. He's also a bard that is obsessed with making his teammates stronger. He refuses all loot offered to him, and gives away all the loot he finds. He'll open suspicious doors and walk in front with little regard for his own safety simply in the hopes of helping his party. But in reality, he's looking for a way to induce tragedy on the party. He wants them to taste ultimate despair so that they can grow stronger by overcoming it.

I plan to have my character betray the party at some point, after the opportunity presents itself to cause maximum despair. Maybe kill our druid's crow familiar or our half-orc's NPC goblin slave before being summarily executed by the party... Laughing as he's made them taste tragedy and grow stronger through it. I can't wait for this character to die. The campaign won't be ruined. The party can easily move on without me. I'm just an inevitable speedbump they're going to have to roll over. I'll be satisfied with dying to them. They'll get experience from killing me. Win/win.

Alternatively you could make a really Evil character that's also really dumb and thinks that everything the party is doing is evil somehow. The party might have to humor him a bit, and play along, but your character could also just be REALLY thick.