I read this post with great interest, since I am developing a social news site that I hope will solve the same problems that you refer to.
My twist on the model is twofold:
One, like Twitter, we rely extensively on "following" -- you don't have to see the "poison" in the ecosystem if you don't want to. It is ultimately very hard (without censoring, as you point out) to keep low quality content out of the stream -- at least this way, you don't have to see it.
The second approach is to implement edit ability -- group edit ability, like in a wiki. This will allow those who are interested in the upkeep of the community can go ahead and fix the problems that they see before them, instead of using ineffectual "bury" and "downvote" mechanisms.
In this way, the community can go ahead and nurture that excellence that attracted them to the community in the first place.
I would love to hear your thoughts on the project, since I approached it knowing full well the lessons of eternal september -- and as a lover of what reddit used to be, I went about trying to fix what I saw were the issues in the site.
Check it out: http://quippd.com/