People use that "this is the asylum" excuse to raise hell over anything that doesn't fit their view of how the forum should run. No holds barred doesn't mean "no user holds barred but admins are barred from doing anything that might upset my delicate constitution". I would offer your own statment back to you. If you don't like the way the forum is run, there are plenty of others.
Why are any insults off limits? Well, I'll answer your question with a question: why don't we allow posting of explicit hardcore images in here? Or Neonazi hate speach propaganda? The main reason is that most of the people in this forum would find those things either offensive, or inapropriate to the point they would no longer view the forum. There is a balance in here. Too much moderation drives people away. Too little drives people away. Just the right amount drives the people that don't agree with your assessment away.
It really is a losing proposition alot of the time. There is also the legal issues with some things. There are lines, One of them for me is insinuating that someone is a pedersist.
What is my job. Some days I wonder that myself. There is a definite mix. I monitor all the forums on the site. I answer user questions and complaints. I investigate karma whining and sockpuppet/ratebot accusations. When a request for a thread lock comes in, I investigate, make a decision on whether the content is appropriate for that forum, then take action if necessary. I Kill gil / gold / plat ad spammers. I kill "win a free piece of electronic crap advertisment" spammers. I keep the stupider posts from the OOT from being posted in here. In short, anything related to the forums. Every single post in the forum that gets brought to my attention, I make a jugement call on. I won't claim to be mistake free, but I think i've made more good calls than bad.
I've been in here longer than pretty much all of you except Allakhazam. I'll probably be here when you close your browser on this site for the last time. So you're pretty much stuck with me. Sorry.
In the last three months here in the asylum not counting Usagichan's posts, there are roughly 200 locked or nuked threads. 195 of those are gold spammers, stupid ooT posts by sockpuppets or low count OOT noobs wanting to break into asylum posting, or other various spamming incidents. 2 more of those were admin test threads. The other three were locked or nuked for crossing the line. One was extremely racist in general. The other two were targetted specifically at me in attacks along the same lines that prompted this whole situation. I've also edited a few dozen idiot posts where people thought that a 15 inch long post consisting entirely of line breaks and the word ***** was a good idea. Compared to the rest of the site, and most other gaming related forums out there that is very lax. I occasionally get comments about it from other forum admins out there that wonder why we don't clamp down in here more.