I'm going to apologize in advance for making generalizations. As with most K5 stories, the discussion is just as much a part of it as the content presented in the body. You're welcome to make topical comments as per usual.
There's basically two types of users on K5: People who submit things to the queue and people who don't submit things to the queue. The diary section might as well be the queue for all intents and purposes. From the 10,000 ft view, the queue has a fairly low barrier for entry - Something merely needs to spawn intelligent discussion and it passes. Similarly if an article has a high density of information by itself, it also passes through. This is the people-element to how Kuro5hin works. There's really no rhyme or reason to how it works, people either decide it's interesting or they decide that it's "not enough" and dump it. Successful queue stories generally build on the discussion threads in K5 and follow the meme of the moment.
I think we can all agree that stories, or diaries, are the heart and soul of Kuro5hin. This means the users themselves are the heart and soul of Kuro5hin. New users now require a $5 buy-in. Does this price match the community? Not really.
The Kuro5hin community enjoys a soft-identity format. A hard identity format for the purposes of discussion would be something like Facebook. Facebook requires users to fill out information about themselves and create an account. A non-identity format would be like 4chan - no-one has any history and no-one needs a username. K5's soft-identity format merely establishes the minimum requirements to have some kind of discussion. Usernames are unique, comment histories are visible, and you can generally track a users discussion history and your own. Where the five-dollar-fallacy comes into play is that K5 used to be soft-identity to the point where identity itself wasn't important. The discussions were important, but users could (and would) make multiple accounts, swap usernames, and generally do what they wanted. Kuro5hin wasn't about the users behind the usernames, it was about the discussion. People, as far as K5 is concerned, don't matter. Usernames themselves only represent arguments, and the arguments are only represented as far as the account has history. Therefor we could distill usernames themselves from "circletimessquare" to "always contrary". Or "lildebbie" to "drug using republican". "Rusty" would be "absentee dad in vietnam". "Aphrael" would be "queer and bitter". Very few people on K5 have kept their usernames and those which have always will have the suspicion of giving the account away.
People who don't like K5 generally don't prefer this format. However when I write something, I realize the content I am posting isn't so much about a contribution in general to the internet (although certainly I have written stories as a manual) but Kuro5hin is more like the acid-test for an argument. I believe the community understands this as a general principal and makes decisions accordingly for articles which generate decent discussion. When writing for Kuro5hin, users must keep this in mind. Drug Using Republican is going to argue as such. Contrary To Silliness will too. The point here is to allow for a maximum of free speech. Could I write an article questioning the holocaust without it?
This is where communities strongly differ from K5. Slashdot doesn't let users post content in any public way. Digg is controlled by the invisible hand of vote-fixing via the admins. HuSi is so threatened by free speech that articles deemed as trolls are hidden and users are banned over the mere idea of considering something offensive to the community. On K5, the opposite is true. While we don't enjoy a brisk development pace, we do enjoy the other rights which come from having free speech with weak identity. This allows for crapflooding, page widening and other fun nonsense but this buys is the security of being able to make a new account for arguing the other side of a point.
Or we could, until Rusty put up the $5 barrier to entry. What the fee actually represents isn't to control the users themselves, but I think that was the intention. The fee represents a handle on ideas. The original format of Kuro5hin allowed multiple shades of argument to be presented by multiple accounts. It didn't particularly matter that those accounts may actually be the same person so long as they presented intelligent and reasoned arguments. While true that some accounts made simply for the lulz don't contribute anything intelligent or reasoned, humor itself has a value to society. Barack Obama, as a K5 account, is a street-wise hood-nigger. Abraham Lincoln would discuss things in the context of the civil war. John Daego was an account I made after Carl on Aqua Teen Hunger Force. Basically, poor white trash, a topic I'm both intimately familiar with and endlessly amused by being from rural Pennsylvania.
The five dollar barrier, however, means we've traded these shades of ourselves for stronger identity, but the fundamentals of K5 have thus changed.