How it could help.
If used responsibly, then the editorial comments people make, constituting a kind of proofreading by public ridicule, could be put to good use. The author could take the suggestions and comments and so forth into account and use them to make a good story really, really great. Although it is the comments IMO that make k5 worth the lost time, consistently well-framed and eloquent stories show that the amateur media can equal (or exceed) the work of the most highly paid syndicated columnists.
The case against editing.
To deflate that last sentiment a little bit, there has always been a problem in my mind with editing comments made in public forums. Basically wherever editing is allowed it seems to be used very frequently, sometimes making the content of replies and follow-up posts confusing. Sometimes it's better to say something controversial, and possibly wrong, so that it can be discussed and there can be learning and understanding. The other matter I am concerned with is the spirit of the public forum. Sometimes people say things out loud that they wish they could take back. If you allowed people to edit every thing they said or published in real life, we all would sound like Bill Clinton or Gary Condit. Nobody should be able to change any story, diary, or comment after it has left the ethereal realm of the moderation queue and entered the corporeal world of k5.
On the more practical side, I have no desire to call for an extensive re-work of Scoop, so being able to delete stories seems like it would be easier and less disruptive to implement.
How it could abused.
I don't like the idea of someone being able to halt discussion on a topic that has progressed differently than they desired. Say I submit a story on gun control and it (unsuprisingly) turns into a US vs. EU flamewar, and I don't like that. Should I be able to delete the story, regardless of the quality of the debate that it is generating? Sometimes it's good to go OT, because I often learn how one issue is peripherally related to another that way.
I also worry that such a system would contribute to less dilligent attention to fact-checking, spelling, grammar, and the very issues that I wish could be improved. Would giving someone the power to delete posts make more people submit low quality 'first drafts' which would be submitted, pulled, and re-submitted to a crowded mod queue? Would they rely even more on other people to fix shoddy content?
Disclosure: I posted a diary on this topic to see whether or not this suggestion would generate any interest.