I think you are right that community is the core issue. I don't think reddit is really a community though, there are certainly some communities that communicate using reddit, and the site does engage in 'participation' activities, but I would guess that the majority of the interaction they create ends up being shallow (on the other hand, I'm sure at least some people have made new friends and such...).

I don't really see how any reasonably open group of several thousand people can ever interact as a community (and I wouldn't be surprised if the limit is in the hundreds, e.g. Dunbar's number).