After years of running a large scale message board myself, one thing I have learned is that you simply can't quantify every situation enough to objectively make the correct decision every single time. An automated system can either be inadequate and unintrusive, or, draconian and inefficient. Using a team of humans is even more chaotic, because each one ultimately ends up falling back onto their own experiences to determine right from wrong. This can vary greatly from person to person, leading to either being too lax or too iron fisted. Both extremes have their own consequences and effect upon the community being watched over.
Even a system like Slashdot's setup, where the community polices itself, isn't free of flaws. A community that polices itself will ultimately normalize with whatever the averages deem "appropriate", for better or worse. In addition, any attempt to override this average will often be met with opposition from the community when the operators' trust in the community gets put into question.
No online system will ever be perfectly safe for children. But neither is the real world.
The only real way to protect children both online and off is for the parents to be more involved in their kids' lives. Talk to them. Keep the video games and computers out in neutral parts of the home where you can actually see what's going on, rather than putting them in the bedroom. Furthermore, don't violate your kids' trust in you by monitoring their actions from behind the scenes using keyloggers or VNC servers. You can be just as effective by watching their actions out in the open when you walk by. If they make a sudden knee-jerk reaction like turning off the monitor or closing windows, you know their up to something and your actions immediately after should be enough to put the fear of god into them when they know they're doing something they shouldn't be doing.
Want your kids to grow up "right"? Then don't let others do your job for you!