Don't let the love-in obscure the fact that you've now set a terrible precedent from a managerial point of view. There are probably a dozen people around you who now know you can be held hostage in a public ruckus and will eventually grant concessions for the sake of peace.
Of course, peace is better than an all-out shooting war. Whoever negotiated the deal did a good thing given the low level things had fallen to. But the larger effect of how it was conducted will be bad, and that is just plain poor management.
To a thousand small complaints you answer "the board is mine, I'll manage it however I want." And that is just fine. So you appoint moderators and you tell them how to act. Good. But then it comes out that when somebody is important they will be placated by "observing" the moderators. (That sure must make the moderators feel you are behind them.)
Then, the argument breaks out into the open. At first, you are unmoving -- then, you are announcing a "compromise" in the most public and cheery way, as if it all was just an amusing disagreement over where to eat dinner.
One minute you're a benovelent despot (which is fine); the next, you're tossing concessions to those with power, or you are conceding to keep the donations up (it isn't clear exactly why you conceded; there is no indication you actually were persuaded by argument that some of the moderation is bad.)
Those who hate the moderators may feel they "won" this; they didn't. Those who like them may think they "won"; they didn't. The watchers who just want everyone to get along so we all can "freep" together may think it ended well; it didn't. The Bush-lovers may think "good, we still have moderators to kick out the loons"; no, you have castrated moderators. The libertarians may think "good, the worst moderators are going to be out"; no, soon you will have the moderators liked by whoever collars JR next week.
JR, you give the impression you are susceptible to manipulation. It is the INCONSISTENCY that is the mark of bad parenting, and bad management.
Oh, here we go. Next thing ya know the "dark side" will be saying they cut their own ears off just to make it look good. ; * )