We all speculate on what the criteria is, and only theymos actually knows his criteria, but your opinion is as valid as the rest of us as we are making educated guesses. There's probably loads of things that are taken into consideration, and considering there haven't been too many incidents with moderators I would say its been largely effective whatever the criteria is.

Even if someone had something absurd like 100k reports within a year, if they're not reporting in sections which aren't getting addressed quickly by moderators then there might be no need. Of course, it might make sense to just make them a moderator due to the fact that they are doing the work anyway, and putting more workload on the existing moderators, but if the existing moderators are handling that effectively, and other factors aren't in the favour of the user who is reporting, then they'll likely not get made a moderator.

Things like reports, timezone, existing moderators workload, trust, and personality type could all be considered. I'm not sure if quality of posts would come into it, as I'm sure there's a lot of users who would make a good moderator, but don't post amazing content or might not even post at all.  It sounds like a headache, and theymos has to overseer all of the moderators actions, probably with the help of cyrus, but I'm certainly not jealous of the amount of work they'd have to put in to actually overseer that.

I wouldn't say I know better, and discussion from differing opinions usually leads to the better option as we can all see the pros, and cons of our ideas. When I say pretty well dealt with, considering the amount of spam content that was getting posted, and only a few global moderators, and moderators available to deal with it, I think it was fairly well done. I actually turned up late to the spam attack, and had around 1000 reports in my queue, but that shot down to around 100 within about 5 to 10 minutes. So, yeah the bot attack was an issue which a lot of the forum users noticed, but in retrospect it was actually dealt with fairly quickly. 

Reporting is very much a thankless job, and if it wasn't for possibly a few staff members messaging me when I was actively reporting I may have had the outlook that you have now. I still remember the day cyrus messaged me about my reports after I think busting a fairly decent sized account ring. That probably offered even more encouragement to me, and ended up with me spamming the current moderators with nearly 40k reports :p We do appreciate it, and I have started to message those that are actively reporting to say thanks, because this might sound cliche, but our job would be a lot harder if it wasn't the community pulling together as a whole, and reporting anything. I don't care if its plagiarism or just "great project" posts I appreciate anyone who is putting in the time to actively report as I know the pain of going through that.