Isn't a moderator's job to.. moderate? Pardon my ignorance, but I'm not sure how a moderator can claim it's within his right to insult someone while at the same time reserving the right to delete what he views as inappropriate.
Just my 2 cents.
Mods can wear multiple hats. There should be a clear way to tell when a mod is being a mod and when a mod is being a regular poster. There are various ways to make it work. Some Message Boards give user mods a second account that is mod only (and often secret). Others make the mods declare in posts when they are doing their mod duties. Most work the way it does here. I don't think any of these are inherently better than the others. It really depends on what kind of work load the mods have and how tightly the powers that be want the message board run.
There are several things at play here, but at the end of the day, this is Dave's home. What he says goes, and if he isn't saying anything, what the mods say goes. If you don't like it you can complain and/or leave. We're all free (with some exceptions to posters in less than free countries) to go out and start our own forum and run it anyway we want. Nobody (except Dave) has a "freedom of speech" here at The Atlas. You have freedoms as far as Dave allows you to have those freedoms. If Dave (or his representatives) want to call a specific poster a dumbass and delete all the dumbasses posts in the dumbasses defense, they can do that.
(I'm in no way telling you or anybody else to suck it up or leave.)