So it turns out there was perhaps some faulty reporting involved surrounding Wikipedia's plans for adding in moderation to their work flow. Check out this article for the full details.
The summary is thus: Wikipedia is not really planning to introduce full moderation. What they are doing is thinking over a couple of ways that they could alleviate some of the problems I discussed in my post. Two approaches are being bandied about as you'll see in the linked article. The first is "flagged protection" which is pretty much the moderation style approach I discussed last time. This is in use already on the German version of Wikipedia.
I still feel hiding changes isn't a great idea, which brings me to approach number two. This one is called "patrolled revisions". This is a lot like what I was recommending, the edits go live immediately so everyone can see them, but the article itself is clearly noted as not vetted.
What Wikipedia will be doing is using approach number one as a replacement for articles that are currently locked down. So in that sense, things are getting more open. They'll also introduce approach number two on other articles about living people. Aside from those, all other articles will remain the same.
So all the criticism and panic is clearly premature. I'm actually quite ok with the approach as described here.
I guess in summary, you can't believe everything you read on the internet. Even if it is in the New York Times.