I firmly believe the problem exists within the community more than anything. Look at the olden days when there were 20 or so default subs. Those subs would grow, and quality would degrade, and good submitters would jump ship to other subs because the environment of the sub would become toxic. /r/atheism comes to mind.

The thing is, reddit as a whole has become much more popular in recent years. We know for a fact that there are occasionally corporate takeovers of subs, and mods taking money and other benefits in exchange for eliminating negative dialog about their product. We've got PR firms and organizations setting up groups of people to try and steer community discussion in a certain direction using subtle manipulation and the power of upvotes. We've also got those trolls and hate group leaders managing subs they have no right to. Ask the folks in /r/xkcd on the last point.

Conspiracy aside, people are also using reddit differently than in the past. We have many, many more passive users who don't submit, don't comment, and don't vote. They check the front page, purple out all the links, then move on with their day. People might even vote, but only on front page content.

So what's the solution?

You could create power users, whose content and/or votes weight heavier than others. This is the digg solution, and it would work to improve the quality, but while it does work to mitigate the effects I described above, it also creates a very negative environment for the average user.

You could create incentives to be active, but that tends to have the inverse effect over time, and turns into a punishment for the casual user.

My personal choice would be massively difficult to implement: eliminate defaults, and create a series of topical aggregates based off of the most popular non-special interest subs. /r/news is the best example of where this could be implemented. Instead of all the news being posted there, it would come from, say, /r/musicnews, /r/worldnews, etc. You as the user could craft this further, by adjusting which subs would go into your f/news feed or what have you. Basically it is the idea of multi's on steroids. I also think the front should be retooled to use them more appropriately. Let's say there's room for the top 30 posts. That would be split evenly between each of the feeds that you have set up, with a clear and visible division. This section is for news, this one is for sports, this one for cute cat pictures, etc.