although you are right to say that the webservice for this action is wrong, the UserWebservice api doesnt have an "easy" way to show inactive users.
When you use getAllUsers method, you don't get all users, you get only the active ones.
To get a list of inactive users, you would have to use the findUsers method, with a filterBean of inactive equals 1, wich the documentation lacks a good example of (or any). A call would look like these:
<soapenv:Envelope xmlns:xsi="http://www.w3.org/2001/XMLSchema-instance" xmlns:xsd="http://www.w3.org/2001/XMLSchema" xmlns:soapenv="http://schemas.xmlsoap.org/soap/envelope/" xmlns:ser="http://services.soap.usm.ca.com" xmlns:soapenc="http://schemas.xmlsoap.org/soap/encoding/">
<soapenv:Header/>
<soapenv:Body>
<ser:findUsers soapenv:encodingStyle="http://schemas.xmlsoap.org/soap/encoding/">
<sessionID xsi:type="xsd:string">?</sessionID>
<filterBeanArr xsi:type="urn:ArrayOfFilterBean" soapenc:arrayType="urn:FilterBean[]" xmlns:urn="urn:usmRequestService">
<FilterBean>
<field>inactive</field>
<operator>Equals</operator>
<value>1</value>
</FilterBean>
</filterBeanArr>
</ser:findUsers>
</soapenv:Body>
</soapenv:Envelope>