I agree that it is pretty rewarding to get appreciative comments, but it unfortunately also lowers the signal/noise ratio, since everyone ends up having to read said appreciative comments (rather than the target recipient).

Yeah, this is a downside.

I'd actually argue that in most cases. keeping signal noise ratio high is much more important than increasing the sheer number of good posts.

Why's that? Right now, for instance, it's easy to create an arbitrarily high-signal version of LW by going to http://lesswrong.com/prefs/ and changing the thresholds for minimum post/comment scores. Wouldn't it make more sense to let users use this mechanism to decide their own signal/noise threshold rather than enforcing one sitewide? (With a sensible default for non-logged-in users.)

If the absolute number of good posts goes up, that's more knowledge for LW's collective consciousness, that we can link to or mention to one another at times when it seems relevant. LW covers a wide variety of topics, so a greater number of absolute posts also means a greater number of posts that discuss topics relevant to any particular user.

As far as I can tell the sequences have a high number of good posts but a pretty low signal/noise ratio. My guess is that to get good posts, writing a lot and then seeing what sticks works well.

On the other hand, the current LW might work well for people who want to make important but difficult-to-understand points.