Defining "bad content" is difficult. I don't think we're nearly advanced enough avoid human intervention. Using user reports works well.
Here's an example: if you go on YouTube you can find harmless videos of parents bathing their babies, and I doubt anyone would call that child pornography. Same goes for something like a birth video, even though it shows a vagina. How do you detect the differences?
I think it'd be an improvement if Facebook were more open with their policies and allowed nudity, even if it required flagging content as mature. To get around this people end up placing tiny black bars in any of the "offensive" parts. But how does that seriously change anything?
I'd say it's pretty reasonable to request users flag content. Detecting it programmatically is currently impossible, so what other choices do you have if you want to allow users to upload content? Should only multi-billion dollar companies be able to have user-uploaded content? How would you handle this issue if you were building a small media sharing site?