Earlier quoted context omitted.
That's a bit generous, I think. Most people aren't smart at all. And even the ones that are don't act objectively and without bias. Ever. Although I will admit that moderated solutions almost always come out better. See slashdot's complete lack of this problem.
Slashdot may not have the problem on a story/post level, but have you ever tried to read every comment on a story? A third are hate speech or spam, another third are repetitious or illogical, a sixth are insightful/funny, and the other sixth would be if they didn't happen to be against the wider political views of the people that had mod points that day. I think the only real solution is to have a small community who…
I share the same point of view, and that's what I'm building right now with my new startup. There has to be a balance somewhere. Too small, and you get a dead community that rarely updates. Too big and it loses focus. The sweet spot is somewhere in between.