It works for 4chan's users or they wouldn't hang out there. But the level of moderation is a competitive feature. Users decide where to hang out based on the quality of discussion, and moderation has a direct effect on that (in both directions - too heavy-handed or too hands-off).

Also, in the end, the people who host a forum get to choose whether they really want to host a cesspool or not. If it's not working for them, they can shut it down, or maybe outsource moderation to Facebook or Disqus.