...it is widespread because it is stable. In any other form of government, it is possible for the government to do something blatantly in conflict with the desires of the majority of the people. When this happens, there is a revolution. When something like this happens in a democracy, the leaders simply get voted out.
Hence, given any semi-random distribution of government policies, over time, non-democracies will undergo many more violent, costly, and painful revolutions and coups than democracies, putting them at a harsh disadvantage. It's also the case that once a country stumbles upon democracy, it's pretty hard to get out of it.
Anyways, going back to IRC, democracy works because the power to stage a revolution is roughly proportional to the number of people you have on your side. Hence, majority-rules yields the most stable situation.
On IRC, the power to stage a revolution is proportional to the number of server owners/admins you have on your side (ie they rebel by splitting the network). That's why IRC is roughly a democracy amongst the site-owners/admins, but not amongst the users. And that's why it's probably going to stay that way.
If you disagree, and somebody has already posted the exact rebuttal that you would use: moderate, don't post.