Reducing Section 230 protections is a giveaway to Big Tech.
Remember that the thing Section 230 does is not that it permits you to moderate; the thing it does is that it permits you to moderate without taking liability for defamation posted by users (and other similar illegal content, but defamation was the motivating goal). One forum, CompuServe, didn't moderate anything, and wasn't held liable. Another forum, Prodigy, moderated a little bit and was. Lawmakers realized this created a clear incentive not to moderate, which goes backwards from the intended goal of defamation law of preventing defamatory speech. Hence Section 230.
You can still moderate in a world without Section 230, provided that you do so well enough to protect yourself from liability, and you have the resources to fight any cases that arise against you. Who has the ability to do that? Big Tech.
Platforms like Facebook will be able to cope with a weakened Section 230 just fine, while still moderating. They'll end up moderating much more aggressively, in fact, instead of deciding to host unmoderated content - because their paying customers are advertisers, not users, and advertisers don't want to pay to put ads on unmoderated forums. (Compare Facebook's advertising revenue with 4chan's.)
But it's the smaller platforms, like this very site, blogs with comment sections, hobbyist-run Mastodons, etc. that will have trouble. They, also, won't decide to post all content without moderation; even in the world as it already is, so many blogs decided to stop having comment sections because they become swamps full of spam. YC runs HN because it reflects well on them; if they were unable to moderate, it wouldn't be worth their time.
So a founder thinking of taking on Big Tech and making their own, better communication forum will realize that their options are to make an entirely unmoderated forum, something that people demonstrably won't prefer to the options they already have, or to spend a huge amount of time and money on moderating their forums as well as Big Tech does. And their potential investors will realize this too. And those companies just won't get started.
(You might say, if this is all true, why was Big Tech so opposed to the Trump DOJ's proposals to reform Section 230? They weren't, they loved those proposals. https://thehill.com/policy/technology/544707-facebooks-zucke... Remember that Big Tech is the enemy, and they control what you hear.)