Encyclopedia Dramatica was created possibly near the end of year 2004 as a wiki/container for material related to discussions hosted on Livejournal, and in particular, discussions which contained generous amounts of trolling, flaming, and baiting. Not only discussions but people and other tangentially related things as well.
After a year or so, the site started documenting stories and happenings created on a whole set of sites othen than LJ, such as IRC chat rooms, 4chan, and Wikipedia. Given the strong anti-social streak of the users who were creating content, the site started hosting progressively more and more defaming material with direct and malicious attacks towards certain internet users who saw their personal information being posted on the site. The moderation was doing little to contain the phenomenon because it was essentially the very fuel needed for a big fire.
Wikipedia and Wikipedians started being more present on the site after year 2006, which is in line with the peak of users at Wikipedia corresponding to year 2007-2008.
Jump to year 2010 and the owners of ED had to quit the site due to repeated problems with the law.
After that, the site never really regained its popularity, possibly because now people tend to be more careful about what they do online, or what they do online is trivial and boring, or more people stopped caring about insults made against them.
Either that, or Reddit has arisen as King of the Hill of Defamation and Insults.
You see, it's just the same thing repeated over and over, packs of white hooded guys hanging others to the highest branch on a tree! I guess Girlvinyl gave too much rope to her masked e-friends, so those who were persecuted decided to gather together and get back at them, first getting them hooded guys, then got some rope, and then gave Sherrod and her closest friends a really long neck. Figuratively speaking