Fuck morality, let's talk common sense first.
I'd start by 404-ing anything illegal *where the domain name registry is located* as well as where the site's hosted. Otherwise the name can be taken off you (in the case of ".com"s) by the US government. This has already happened to sports feed sites.
'Illegal' would include illegal media plus any comments conspiring to, procuring or encouraging illegal acts. 'Illegal' comments for me would not include humour, honest opinion, fantasy fiction or obvious hyperbole (e.g. like the guy who tweeted about the airport). I'd come down tough on illegal pics & vids, but would try to play it lenient working out which side of a sometimes grey line the comments fall. In any event I'd be damned sure to openly document the reasoning behind a difficult decision.
I'd also be aware of context. This is not a porn site per se, but many picture collections within it are pornographic. So, a clothed kid pic in isolation might get by, although I'd be wary of the motive for posting it, but a clothed kid pic surrounded by porn uploads or comments pertaining to illegal acts would definitely get kicked off.
Anyone wanting and encouraging illegal shit can host it themselves. For the two or three days their site would last. And the years of fucking anguish dealing with the aftermath. No takers? Thought not.
Then, once I'm happy the legal side is secure, I'd let the morals work themselves out. Get the groups beefed up to handle different niches and let people gravitate towards their own level (maybe with a gentle pointer here and there).