There were also problems in that the initial setup of k5 was completely user-driven and user-generated with votes on the mod queue determining what was good. Early attempts to 'control' the crapflooding issue was to create the "diary" section, which functioned as license to post anything you wanted. The $5 fee was a reversal of that approach AND didn't add anything for users (Scribd?), so people mostly left.
Another thing that probably drove the decline of K5 was the rise of blogs for everyone. Why post at K5 when some bunch of goons could remove what you regard as worth publishing while on your own blog it went live always?
That wasn't the entire community, dont get me wrong, but it was enough to slow activity to the point where it wasn't very interesting anymore.