exactly.

of course Hacker News will break news EARLIER than TechCrunch so it would be better for "techcrunch" for this site to go underground - then "techcrunch" can break the news :P

I think of social websites as country clubs. The club is fun and good when you know everyone's name and you're able to form deeper relationships with people. Country clubs are not fun when it's filled with tourists who aren't interested in contributing to the club.

The difference is that HN was not designed with maximum growth (and hence ads or being acquired) in mind. It seems mostly geared towards bringing people to YC, and motivating hackers to try startups. A big community isn't necessarily worse at this, but neither is it necessarily better.