People can be extremely evil and still respond positively to being given ownership of something. You’re reading what you want to read, not whats actually there.

Not OP but:

it is power itself, and the effects of power, that make people stupid and irresponsible.

I read it as; most people are negatively affected on both sides of power imbalances. The natural answer to this is to attempt to remove power imbalances.

In the context of decision making, no matter if you think humans are inherently goody two shoes or not; most people respond well to increased responsibility. More democratised decision making and ownership in a community creates a positive feedback loop. An easy to understand example is in a company a flat bonus for meeting your target gives no motivation to a worker after they meet that target compared to worker coops splitting profits evenly between all workers because they share ownership of the company.

A lot of it is in the design stage tbf. If features/UI can be cut or simplified then it can make a big difference. Performant code is good and the tech stack you choose also matters.

Fracturing the space is way more destructive than whatever you mean by destructive moderating, since the moderating will only affect some communities and even within that, some users while defederating will split the user base.