This article tries to oversimplify a very complicated issue. Remember that nothing is hosted on reddit. It just links out. Now they do own Imgur, but if something isn't hosted on there, then it's a link totally outside the community.
This same type of controversy can be traced all the way back to all the jailbait subreddits. Reddit is centralized. It suffers the same problems as most social networks.
Thinks like Diaspora are decentralized. Recently, people were complaining about Diaspora spreading anti-American speech that often gets banned and deleted from Twitter/Facebook. While some pod owners could chose to delete this content, because Diaspora is decentralized, it can still stay out there on pods that are either friendly to it or don't care. In essence, that's showing a system that WORKS CORRECTLY.
Reddit's isn't broken so much as centralized, social networking in general.