It's the problem anyone who moderates a system faces, when the users vastly outnumbers the moderators your moderation has to have some level of opaqueness and unpredictability or else you have no chance of keeping up with people gaming the system.
If you randomly bring the hammer down on a fraction of the people who just touch the fence, the fence will be pretty clear of people leaning over. But you'll sure gain a reputation for opaque capricious moderation.
NB: I am not against this system, and I recognize it's widely applied in the world.
The problem is that what is "widely applied in the world" is using the grey-area of who to bring the hammer down on randomly to tip the scales in some way.
How do you ensure you select trusted individuals? Create institutional mechanisms with accountability and checks and balances; e.g. community voting to bestow time-limited power on individuals, and appeal boards to as a check on abuses of that power, and perhaps recall votes to remove someone.
Opaqueness isn't the answer. Opaqueness leads to injustice.
You certainly don't have a chance of keeping up if you don't use the technology we've developed over thousands of years specifically to deal with people gaming systems. The technology of government.
(I'm only talking about what the case is, in this context, not why, nor judging it at the moment.)
But perhaps a better example than reddit is the internet as a whole. ISP and hosters are dumb carriers and moderation is mostly left to the individual sites. Depending on your hoster it may take a court order for them to do anything at all.
In other words we need more platforms that put themselves front and center, avoiding that also avoids the reputation problems with a hands-off approach.
And so on and so forth. It's administration by reacting to bad press.
That said, I absolutely agree that the answer is likely one of checks/balances/as much transparency to the adjudication process as possible, and yes Facebook has a lot to learn there from existing governmental technology.
Also it's kinda messed up Facebook can't just add more moderators because it's gonna cost them. They are worth 786b because they decided not to moderate their content enough.
Finally why isn't advertising taxed like oil and cigarettes is? Seems obvious we should disincestivise consumption, but then FED's primary goal is minimise unemployment...
Similarly you could use an invite system with limited invites, if you want growth at a constant rate- although this could still lead to moderation problems if you don't grow your moderation team at the same rate.