I think you hit the nail on the head with your last point, though I wouldn't necessarily call it moderator abuse. The actions that moderators can take on reddit were built on a laissez faire model of moderation, where anything goes except blatant spam. This obviously doesn't work very well for moderators who choose to run their subreddits in a different manner, and this happens to be most of the big subreddits, because laissez faire moderation just doesn't work on a large scale.

For example, the sole /r/truereddit moderator believes in a laissez faire moderation style, and the subreddit is slowly getting worse and worse as the userbase increases. Every time a /r/truereddit post makes it to the front page, a virtual swarm of idiocy surrounds the entire subreddit for a few days.

But that's the only way the moderation system is designed to work. There's no way to remove/approve content without training the filter. If someone submits a codinghorror post to /r/programming that is completely off-topic, the moderators either have to remove it, effectively warning the filter that codinghorror might be spam, or hope that the userbase does the right thing and votes it down. Usually, they won't, especially the people who are voting from their customized front page, not paying attention to what subreddit something is in.

It's broken, and the admins have never really expressed any concerns about this fact.