Which is a good thing for reddit, toxic communities posting toxic garbage that drifts into /r/all isn't good for users or revenue.

A minority of the banned communities fit that description, though.

Regardless, I’m pointing out what is the current alternative.

Scanning over lists of banned communities, I wouldn't say it's a minority. It seems like that they're pretty predominantly awful groups of people posting awful things.

Do you think all banned/quarantined subreddits were "posting toxic garbage"?

The majority probably were.