My thoughts.
First off, people need to stop assuming nothing was done about a post. Sometimes warnings are given and the average user will not know the difference. Also, mods are just like regular users and sometimes they post without reading the entire thread.
Second, mods ban/warn people who were never reported. However, we can't read everything, as most people pointed out. In fact, I don't have the time to read this entire thread. As for being lazy, you can talk when you make 10k VG$ by working in the game DB, or writing 2-3 review articles. Most mods also do other things on this website, but we also have dedicated mods too.
Third, We would need a couple hundred moderators to read every post in every thread, game page, wall, news article, review, and weekly sales page. At that point, half the active community would be moderators.
Fourth, talk about lazy, you can't even click the report button then click the submit button. It only takes seconds and you don't really have to fill out the description box if you don't want to. Also, as montana said, it is like the police, they don't magically see everything, and the citizens have to call them to take care of things.