"but we need some enforcement mechanism to remove scams and illicit material"

Yes, we would need the ability to actually remove posts, not just hide them.

Who would make such a decision? And how would you mitigate the damage potential of a "rogue mod"?

I heard an interview with a fa.cebuk flag-checker recently, they were paid a fractional wage and worked from the Philippines. They said that they were so overworked and borderline traumatized from viewing all the horrendous flagged content, and under pressure to review 1000 flags a day, that they ended up just clicking "denied" repeatedly on all their cases.