4chon died because 4chan's /pol/ and /r9k/ were restored. These boards being deleted were literally the reason that 4chon was created. 4chon didn't die because of hotpocketing, 4chon died because it lost its niche. STI cared about how the mods treated his userbase. See https://gist.github.com/savetheinternet/5184784.
711chan was created with the intention of being free from hotpocketry. 8chan /pol/ was effected by some of the absolute worst hotpockety, but guess what? It still maintained its userbase. Even though imkampfy was the most terrible mod around, he managed to keep his userbase. Sites like meguca and /polk/ were made. /polk/ died. Everyone was happy when Codemonkey unfucked /pol/, but that doesn't matter.
There isn't anything wrong with having moderation as long as you do it with common sense and respect users. You do not need to let the quality of your board sink through the floor to keep it alive. It will do quite the opposite.