Well maybe Ning's execution of the model leaves much to be desired but what I wanted to express was the idea that a social network where the owner of the network paid for it is a good system because the provider of the service has to cater for the needs of the customer. And if the customer is a user and not an advertiser then I think the user should get better service.
I think you're focusing too much on Ning. What I am really referring to is the business model that it uses. As you've suggested it's imperfect and maybe Ning hasn't run their business very well but I don't think because of that we should say that another company cannot implement the model successfully.
The model I envision is very similar to the shared hosting model employed on the web. You sign up for hosting and you install a CMS like drupal or wordpress and you have yourself a community and you pay a subcription fee. But instead of drupal there could be a social networking application. Each network creator would be responsble for it's promotion and marketing but I think it's a viable model because there are existing real world communities that would like to establish an online presence and something like this may be a great way to do that.
With or without Ning, someone still has to pay the associated software/server/maintenance/bandwidth costs.
You are not taking out the incentive to abuse peoples data to increase revenue with your model.
