We need community based validation. Human nature can not be changed. Animals will always resort to violence and retaliate when provoked. We need to develop solutions that force greedy people to play nice and share in order to be greedy.
The problem with a council of moderators is that they are people. We should try to avoid solving human nature problems with solutions that can be exposed by human nature.
so we need an AI, or we need redundancies that help mitigate conflicts
You need a better designed system that is flexible for different users but has clear bounds on undesirable behavior.
If you can do it, then it should be allowed.
That being said there are some corrective mechanisms built into Steem. Flags. They just don't work very well and require fallible humans to implement. This would suggest we need a more rigid change through code rather than placing our faith in human relations. The internet is filled with narcissistic greedy trolls who forget that they are human.
So, to answer your question: probably the 2nd, or a little bit of both.
"The internet is filled with narcissistic greedy trolls who forget that they are human."
The only way to stop this, is the Zuckerberg-ism of the internet. Get rid of anonymity completely, so people are held accountable. I don't like the idea, but man, the more and more I see the way people behave when they aren't accountable for their actions, sometimes I wonder.