There was a thread in lj_dev (now deleted) about an action lj_abuse took on someone's account and I pointed out that lj_abuse is seen by many people as a sort of secret police that really has to answer to nobody but that can suspend and delete accounts at will. People see them as a group to be feared, and fear of lj_abuse casts a pall over conversation sometime even going so far as to influence whether or not features from suggestions get implemented.
The thing is that we simply don't know what goes on over there other than the occasional rumor that leaks out. The existance of this dark group is a reason for people to be unsure of their accounts at LiveJournal, and so it is a perfectly valid reason that people would not want to pay money for paid accounts.
At the same time I don't see why their actions can't be public with, say, names blanked out to protect people. It seems to me that this would clear up the picture for everyone AND provide them with feedback as to what the general LJ public thinks should be done. If there were at least summary reports released regularly, briefly discussing what they've been up to and the cases they've dealt with it would do a lot to disolve peoples' fears.
The point of this post is not whether or not lj_abuse is justified, but rather how the existence of the underground group affects LiveJournal's bottom line. To me it seems to be a huge PR blunder that simply doesn't have to exist. Every time I hear rumor of lj_abuse mishandling a case I just think about how I'm glad I've not paid money for something that could be taken away on a whim, a notion that might be false but that LiveJournal has taken no steps to dispel. I wonder how many other people don't pay for LiveJournal because of either fear of lj_abuse or disgust with the negativity the group definately adds to the environment.