Interestingly, Second Life, the virtual world built of user-created content, does not have this problem. Second Life has real estate with strong property rights. Property owners can eject or ban people from their own property. So moderation, such as it is, is the responsibility of landowners. Operators of clubs ban people regularly, and some share ban lists. Linden Lab generally takes the position that what you and your guests do on your own land is your own business, provided that it isn't visible or audible beyond the parcel boundary. This works well in practice.
There are more and less restrictive areas. There's the "adult continent", which allows adult content in public view. But there's not that much in public view. Activity is mostly in private homes or clubs. At the other extreme, there's a giant planned unit development (60,000 houses and growing) which mostly looks like upper-middle class American suburbia. It has more rules and a HOA covenant. Users can choose to live or visit either, or both.
Because it's a big 3D world, about the size of Greater London, most problems are local. There's a certain amount of griefing, but the world is so big that the impact is limited. Spam in Second Life consists of putting up large billboards along roads.
Second Life has a governance group. It's about six people, for a system that averages 30,000 to 50,000 concurrent connected users. They deal mostly with reported incidents that fall into narrow categories. Things like someone putting a tree on their property that has a branch sticking out into a road and interferes with traffic.
There's getting to be an assumption that the Internet must be heavily censored. That is not correct. There are other approaches. It helps that Second Life is not indexed by Google and doesn't have "sharing".