As a long time frustrated user, submitter and ex-editor of the Open Directory (AKA Dmoz) I had feelings of Schadenfreude mixed with sadness when I learned of its decline. It has lost a lot of its viewing public, mostly because search engines do the search job better, but it has also stopped accumulating new listings. Triplicate listing of garbage pages, editors that tyrannize people with other political viewpoints and confine their directories to polemical articles or to their friends' web sites, arbitrary and capricious editing rules used to keep out sites that editors don't like, all detract from the quality of Dmoz. Lack of quality ratings and quality criteria are also a problem.
There are a few articles on the decline of dmoz around the Web, and they have attracted quite a lot of comment. Dmoz editors keep writing to say how great they are, without any understanding of what the statistics are telling them. Frustrated users are venting, but dmoz editors are never going to take them seriously, and that's a big part of the problem - contempt for users, arrogance, the elitism of a closed group. But there are a lot of good editors at dmoz and it is worth saving from itself.
Some enterprising people made a dmozsucks.org Web site. God bless 'em, but directories like dmoz serve an important function if they are run right, because they can provide information about quality of Web pages to search engines. My detailed thoughts about this are at: The Decline of Dmoz.