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Do you think that setting terms of use on the users generated content (UGC) limit the freedom and creativity of the user when he express himself? Do you think UGC means no limitations?
No, Not really. Terms of Use do not limit users freedom and creativity when interacting with contents of a site - on the condition that 'the people even love your web site or product/ app'.
If you create a site or web product that people love and if you're a lot more better than your competitors, people will use your site - although they'll complain. The only time that most will leave is when a better competitor comes on board and offers
Look at Facebook - everytime there's a new Terms of Service we hate. We love and hate them.
Look at Google and all the awesome Google apps - some with not-so pleasant Terms of Use. The same love-hate relationship.
But, we still use them and thousands more people join everyday.
Yes and no.
1- The limitations should not exist on user generated content.
2- If at all, it should exist to ensure that there is no spam on the social properties.
3- Control abusive language on the social properties.