This works well with reddit. Each community has a different moderation style, often aided by bots. If you don't like a community or its moderation, you can look for another community or create your own, as it frequently happens.

Reddit has its problems, but I think such a federated moderation system is a decent solution for larger websites. However, you need to provide the moderators with the right tools to enforce their rules. Throwaways were a bit of a problem on our humble subreddit, as were link spammers.