I would love to see a site like reddit with zero moderation, the only thing controlling the content being the upvotes.
Over time I have basically stopped submitting anything I make to reddit, after dealing with stuffty mods and handicapped self promotion rules.
On to the subject at hand, the subreddits they banned were horrible, but where do you draw the line? There's plenty of offensive stuff and even cruel stuff on reddit, but reddit has always kind of let it exist.
Honestly though I think people are overreacting, I mean at the end of the day it is just a website, if reddit destroys itself a replacement will come eventually.