I have to agree with you about the general reddit.com, but some of the subreddits are still good or even great.
However I doubt HN will follow, because unlike digg, slashdot and reddit, PG has shown no interest in gaining traffic at the expense of quality (indeed, he has called for the front page to be splashed with Erlang links, precisely so as to get those who wouldn't fit with the site to go elsewhere).
It depends, the tipping point is when currently undesirable behaviour gets rewarded, rather than downvoted as it currently does. In general I still feel hacker news as a community gets it right in which content and submissions are voted up and which down.
Great point. The tipping point for me on Slashdot was when insightful comments would get modded "overrated" just because they didn't agree with whatever pro/anti/MS/Linux/Apple/Democrat/Republican bias the moderators have. When the site gets so overrun by "average" users (whoever that is) with mod points that they can completely bury good comments and outright inaccurate comments get +5.
HN seems to be very good about accurate moderation. If the site ever reached the popularity of Reddit I think it would change.
This is not something reddit can fix, and I fear that reddit will meet the same fate that digg has recently met. Both digg and reddit gained users at a steady pace, then skyrocketed in users and plummeted in intellectual value. On both sites users complained about how the site had changed but no one listened or cared. Eventually, as all the intellectually curious users left, the users that remained realized they are no better than 4chan and began looking for a new home as well. I believe this is an inevitable cycle for all social news websites. I wouldn't be surprised if in a few years I am fleeing Hacker News for the same reason.
I'd love to hear what some of the reddit admins think about how reddit has changed over the years, seeing as you all have had a better perspective than anyone else on reddit's evolution.
Good luck monetizing reddit, I will most likely donate some to show my appreciation for all reddit has provided me for the last couple of years.