Friend-to-friend networks[1] bring the self-moderation most real-world networks rely on to the digital, without imposing a centralized power structure.

No surveillance needed: if you see one of your peers (/"friend") committing a crime, it's on you to report it. On the other hand, if they are breaking a law nobody cares about (e.g. buying weed), nothing is going to happen to them. That's how society works already.

RetroShare, though it's almost dead, was a wonderful example of this. File-sharing is anonymous, but limited by a certain number of hops through your friends and the friends of their friends. As such, for a regular user, it had all the warez any extended group of friend would like to share between themselves, but none of the child-pornography or snuff films you could expect to end up on in "global" anonymous P2P networks. And it could even be free of warez if your friends abided by intellectual property laws.

[1]: https://en.wikipedia.org/wiki/Friend-to-friend

This falls down a bit in the GPs example though, doesn't it? Those in the stadium committing the "crimes" of roulette, drugs, or the rally would say that whatever they may be doing is "breaking a law nobody cares about."

That doesn't absolve anyone of responsibility in regard to the law. Whoever was in contact with them and suspected them could report them to the police. In most jurisdictions, witnessing a crime and not reporting it is also punishable. It simply prevents the over-zealous censorship that happens when you put all responsibility on a single actor (Tumblr, YouTube, ...).

>In most jurisdictions, witnessing a crime and not reporting it is also punishable

Usually such laws only apply to specific crimes.