Reddit is the biggest and most influential website you've probably never heard of. The self-styled "home page of the internet", it can pull in more than 3bn page views a month. An article posted on its front page can expect to pull in half a million extra visitors, at minimum – and it was given extra gravitas last month when it was judged worthy of an online campaign stop by President Barack Obama himself.

But just when it should be celebrating a moment of triumph and recognition, the site has been thrown into chaos by a bitter row stemming from its seamy underbelly – and it's a row that could have far wider consequences across the internet. The problem stems from several boards on the site (knows as "subreddits") concentrating on "creepshots" and "jailbait" – sneaked photos, taken on the street or lifted from profiles – which focused on obtaining and publishing revealing pictures (including upskirt shots) of unwitting women, or underage girls.

After sustained outcry, the site banned most of these subreddits, but Gawker writer Adrian Chen – a journalist who regularly seeks online notoriety, often successfully – had tracked down the real identity of the man behind many of these forums, interviewed him, and on Friday published a lengthy article "outing" him.

Reddit reacted furiously, in large part because the user, "violentacrez", was a prominent one and on friendly terms with many of the people who run the site.

New media's reaction to the dilemma was far more extreme than that of old media: Reddit moved to stamp out the article, and punish its writer. The volunteer moderators who run many of the largest sections of Reddit elected not just to ban links to that particular article, or even articles by that particular writer – instead, they imposed a ban on all links to Gawker, or any other sites affiliated with it. Want to post a link to Gawker's stories on Bain Capital's internal documents on Reddit? You can't. For a time, the site's paid staff even introduced a site-wide ban on links to the article, before backtracking.

Why is this any more than just a stupid online argument between Gawker and some forum moderators? The answer lies in Reddit's almost unique online role. Unlike many other sites similar in scale, Reddit has stayed fairly true to the anarchic, freewheeling spirit of the early internet. Baffling to outsiders, Reddit is laced with memes, trends – and as a result, a certain political culture is shared among a huge swath of its user base.

At the core of that is a veneration for free speech and a free internet that borders on the obsessive: the successful battle against US anti-piracy bills Sopa and Pipa was driven from Reddit, as was much of the online resistance to the subsequent (defeated) cyber-security bill Cispa. Redditors are regularly among the first to rage at any hint of "corporate censorship" from Google, Twitter or Facebook. They've also regularly come to the defence of sites sharing links to copyrighted content – based around a precedent in US law that a hyperlink is speech, and so protected under the first amendment.

Free speech is also the argument respected Redditors have used time and again to defend the site's sleazy side. Hey, they say, we don't like these guys posting upskirt shots of women, but … it's free speech!

All of which makes the actions of Reddit's core community, the volunteers who run most of the site – backed up tacitly by the staff – so bizarre and counterproductive. Reddit's mods aren't boycotting a site they dislike: they're imposing a ban against it on millions of users. They haven't reluctantly imposed censorship to comply with national law, or even with Reddit's own policies (the site is vehemently against trying to "out" users' real identities). Instead, they've issued retaliatory bans against a writer, and his outlet, because they don't like what he is saying.

Reddit's new stance appears to be that free speech is great – as long it's speech it agrees with. Which is a position the RIAA (which seeks to close sites linking to pirate content), or even China's Communist party could happily agree with.

It really has created the perfect Platonic form of fail: not only have the members of Reddit's core community made themselves look like hypocrites on an issue incredibly close to their userbase's heart, they have done it in order to protect a user who created forums to post content which was at best sleazy, and which at its worst bordered on the paedophilic. For those trying to change the law in ways Reddit dislikes, Christmas, Easter and several birthdays have come all at once.

At minimum, the farrago reveals that a site with huge influence in selecting which stories and content will take off online is less democratic by far than it appears – and is instead subject to huge control by an apparently capricious group of mods. At worst, the row will undermine the causes their tens, at times hundreds, of millions of users stand for. Next time Reddit issues the battle cry against a new law affecting the internet, who will saddle up?