Ellen Pao's Error
Pao was right to want to increase the user-base of her company's flagship product and she probably wasn't wrong about the likely obstruction that her users' culture represented to the goal of growing the user-base.
Her error was in her approach. Although she was faced with a social problem, she failed to consider that the social network over-which she was given stewardship was still a technical creature; all the social behavior was supported by software.
Rather than using the engineering tools at her disposal, Pao attempted to solve the problem by grand-standing and confrontation. This shows profuse ignorance about how things are on the Internet both socially and technically. This ignorance raises honest concerns about her competence as the CEO.
Had Ellen attempted to solve the problems that her company faced with its customer-base with the tools actually at her disposal, I believe things may have turned out very differently. Had she asked her engineers to apply their engineering skills toward making Reddit's social climate more agreeable to everybody, she would have gotten very different results.
A competent CEO would ask "what does our product do to enable the unsavory behavior in our users? How can our product change?" Rather than bellow about feelings, a competent CEO would consider that the centralized webforum model that dictates the shape of Reddit's service isn't exactly conducive to allowing people to select the social environments in-which they feel most safe.
Facebook, by contrast, is. Each user must request "friend" status with each other user before they're really exposed to that user's content. Trolls do exist but Facebook provides its users the tools to ignore posts by those users who aren't totally in line with the sentiments of the user.
Facebook's model of "opt-in to people" model means that you only risk exposure to individuals who suck as quickly as you friend them. If there are users who are jerks irregularly, Facebook further offers you the tools to refine the pleasantness of your feed by allowing an opt-out of specific kinds of information.
This model allows users to shape the social experience to suit whatever they are comfortable with. It seems entirely possible that you may end up with a cluster of trolls for friends if that's your bag but there's nothing in Facebook's model that requires them to be part of your feed no matter how big those clusters are or how much they up-vote each others content.
The ability to introspect upon one's own company and that company's own software/service is the mark of a good Reddit CEO. This will need to be considered by whoever it is that succeeds Pao.
Considering the wisdom of things like IM2000 and XMPP, it is possible for Reddit to offer all users the kind of social network they're most comfortable with while not engaging the unsavory residents of the web.