This post will be slightly lengthy but I'm breaking it down into ~very~ bite size chunks, 'cause I hate TL;DR posts as much as the next guy.
Look at it really quick. If you think you don't have time to read it, please come back later to give it the maybe five minutes it would take.
To go off of what Sabu said, if we try to address the status of the SL community as an "issue," then it is certainly a matter of attitudes rather than a problem with brokenness, as the topic originally addressed.
Now, that's only if you even think the state of the SL community is an issue. As some have said, really, it's not so bad.
But, on the point of attitudes, understanding the problem I think is really just simply an error in communication. Legislation is not morality, so we can make, amend, and disband RP rules until we're blue in the face and it really won't change anything much, I don't think.
The real issue is merely that the majority of players I have encountered/seen adhere to a policy of individual relativism or social relativism. To put it simply:
Players either:
-Say "You do what you think is right, and I'll do what I think is right, and we'll just let bygones be bygones so that everyone can get along." i.e. "What is right" is determined relative to whatever the individual player believes.
Or
-Say "This is the way that our group does this, so that's how we'll do it and if you guys want to do it differently, we'll just kinda try to keep clear of each other." i.e. "What is right" is determined relative to what a clan or close-knit group of players believes.
But both of these relativistic policies that are used to try to pacify situations are actually creating the problem because when whatever is "right" is determined by the individual or by a societal group then there will obviously be disagreements between individuals or groups and there will be no way to solve those disagreements until (1) one party forces their decision over the other or (2) a third party is selected to essentially pick a side to favor.
Now, most people, whether consciously or subconsciously, already know what I have just said.
So then they propose the next solution, which, unless I'm mistaken, is sort of what was being called for with the opening of this thread: Let's hard-reset everything and create a better system of rules that is absolute so that we can keep everything regulated.
Yeah, that sounds nice. Do I think a hard-reset on SL would fix a number of the issues? You bet.
Well, for a period of time anyway, but that solution is definitely a solution of absolutism. Ultimately, however, I think whether things are left as is or whether we hard-reset with better legislation...
Legislation still isn't morality.
The individual relativism and social relativism pacification solutions won't work because they intrinsically create situations that can only be resolved in fights where one person wins (ultimately boiling down to a situation where there is no right or wrong and everything becomes nihilistic), and the absolutism solutions won't work because we cannot force every member of the SL community to adhere to legislation, and frankly, we shouldn't try to anyway.
I would propose this: There is a solution that can be found by examining extremes and finding a point of moderation; a policy of objectivity.
The characters are the thoughtful creations of the creatively talented players. The role-playing is the thoughtful creation of the community and needs to be cultivated carefully and with an objective eye.
When it comes to your own creation, love it and take it as far as you want. That's what this is all supposed to be about.
When it comes to the community's creative RP, learn to be civil and objective. Be kind to others. Separate your personal emotional attachment for the sake of RP-related discussions so that we can use logic and reason to decide on best courses of action. Listen to others. Be willing to hear what others have to say and try to understand the entirety of their perspective; be aware and honest about when you are wrong. Likewise, explain your own perspective calmly and provide details to support any facts you present.
I think with the proper attitude and outlook we could move forward to create solutions for any function or facet of the RP that we think we need to create, adjust, or abolish.