But you might be right. I've been on HN for 3+ years and i've never seen anything like this happen before. This is clearly an abuse of power and is not in any way an act on the behalf of the community.
dang is here as a moderator precisely "on behalf of the community." As in, he acts to facilitate productive discussion. You might disagree with his decision here, but I can't see any way in which he has different goals than you would want him to. At worst, he has made a mistake, and the backlash from it will make him not do it again. (At best, he is being "the hero we need" by attempting to stop a flamewar argument before it starts, even if that means taking the heat that that flamewar would have spawned entirely himself.)
My point was that it doesn't, any more than a waiter asking after your mother's health when she's just died implies the restaurant is on a decline. That's not insensitive (therefore implying the restaurant is now hiring insensitive people); it's just a faux pas (therefore implying the restaurant is hiring regular ol' fallible humans.) The change to the article title here, likewise, was not an abuse; it was just an overly-hasty application of the regular HN guidelines—the thing dang does literally all day without anyone noticing when he's doing it well, done with slightly less care than usual.
dang is a regular person; regular people realize when they do things other people don't like, and then stop doing those things. Systems composed of regular people (i.e. not tyrants and sycophants) self-correct, rather than entering downward spirals. Not everything presages the end of an era. Most things, where conscientious people are involved, are just hiccups.