I think playing the 'endless game of whack-a-mole' really is their only option in the short term. Yes, it can get expensive. But if they want to continue on their current insane traffic trajectory and gain a wider audience, they need to be on top of the human moderation process.

This traffic report isn't accurate, but the trend is right (from what I've heard): http://siteanalytics.compete.com/reddit.com/