It went downhill when they allowed getting an invitation via single blog post, requiring just one person to like it enough to give an invitation. Which wasn't hard to write - just translate something popular from hackernews before anyone else does it.

Shortly after, it became hilariously easy to farm and manipulate karma balances across the entire site. With 50 accounts (mults or real people all the same) you could create a new account a day.

Monetization started when it was already in a death spiral.