For me, I think it actually works well as a user interface.
If I'm in a mood to be charitable and particularly open-minded, I can choose to squint closely or highlight with mouse, and read a greyed-out comment.
However, once that reading is done, the fact that it's greyed out means I don't feel the need to respond to it, correct it, etc. I know that it's being hidden, that people will give it less credence and attention. Plus, I just don't have to look at it once it's no longer highlighted.
In effect, greying out text is a gentle reminder to "don't feed the trolls"
Often it's a waste of time to highlight those posts with my mouse, because they're usually downmodded for good reasons. But I still feel compelled to look, and I doubt I'm alone in that respect.
To fix this, I'd limit the text contrast to two levels -- normal and obviously-but-not-illegibly faded. In other words, don't make it look like you're trying to hide something from me. If a post is so bad that it deserves to be rendered at near-zero contrast, then it's bad enough to delete altogether... and only blatant spam falls into that category IMO.