Reddit is an interesting case because not only do the people who use the website create all of the content, but they also do almost all of the heavy lifting of managing and moderating the site. That sounds like a really good gig, except Reddit hasn't ever really managed to make money. Yes, it gets all the content for free and sells ads, but not nearly to an extent that makes a profit.
There's another problem, which is that if you give people a lot of control over your website, you'll build a thriving community--which seems like a good thing--but if you want to make changes that affect your community, they might get upset. They might even decide to protest. Considering the amount of control you gave them over your website, it doesn't seem ideal to have them angry or protesting.