Yeah, I will agree with you that there can be some smaller-scale systems that work fine. That said, in these cases in my experience it's always few key "hero" mods who are just very committed to volunteering to keep things cleaned up.
Without actually hiring people, it's hard to get that level of commitment, and just as you are saying, as soon as the work gets hard enough (eg clever trolls that turn users against each other, or paranoid political crusaders who think the mods are in league with unseen forces), even the best volunteers end up quitting at the worst times.
In the long run I think the solution is just hiring moderators. It costs money, but if you want a job done well and consistently ya gotta pay.
Without actually hiring people, it's hard to get that level of commitment, and just as you are saying, as soon as the work gets hard enough (eg clever trolls that turn users against each other, or paranoid political crusaders who think the mods are in league with unseen forces), even the best volunteers end up quitting at the worst times.
In the long run I think the solution is just hiring moderators. It costs money, but if you want a job done well and consistently ya gotta pay.