One error in the article: the name Xanadu came from "The Skills of Xanadu" sci-fi story by Theodore Sturgeon in 1956 about a world with nanotech-based wearable networked mind-interfacing computers for sharing knowledge, skills, and more.

I asked Ted Nelson in person about this at IBM Research around 2000 when he came to gave a talk. He thanked me for reminding him of the exact name of the story which he said he had been trying to recall.
https://archive.org/details/pra-BB3830.08
https://archive.org/details/galaxymagazine-1956-07

That "Skills of Xanadu" story seems to have inspired many people in different ways even if they had forgotten it. It turned out it inspired a supervisor at IBM Research to go into materials science research (the nanotech aspect). He had not consciously remembered reading that story until I reminded him of it.

That said, Theodore Sturgeon himself probably took the name from Coleridge’s poem.

In answer to the question posed at the end of the Nautilus article: "Should the web remain free, flat, and open? Or would a more controlled and curated environment lead, paradoxically, to greater intellectual freedom?", I like Manuel De Landa's insight on meshworks and hierarchies when thinking about seemingly either/or design issues between fire/chaos/anarchy and ice/order/hierarchy.

From the conclusion of De Landa's essay "Meshwork, Hierarchy, and Interfaces": http://www.t0.or.at/delanda/meshwork.htm
"Indeed, one must resist the temptation to make hierarchies into villains and meshworks into heroes, not only because, as I said, they are constantly turning into one another, but because in real life we find only mixtures and hybrids, and the properties of these cannot be established through theory alone but demand concrete experimentation. Certain standardizations, say, of electric outlet designs or of data-structures traveling through the Internet, may actually turn out to promote heterogenization at another level, in terms of the appliances that may be designed around the standard outlet, or of the services that a common data-structure may make possible. On the other hand, the mere presence of increased heterogeneity is no guarantee that a better state for society has been achieved. After all, the territory occupied by former Yugoslavia is more heterogeneous now than it was ten years ago, but the lack of uniformity at one level simply hides an increase of homogeneity at the level of the warring ethnic communities. But even if we managed to promote not only heterogeneity, but diversity articulated into a meshwork, that still would not be a perfect solution. After all, meshworks grow by drift and they may drift to places where we do not want to go. The goal-directedness of hierarchies is the kind of property that we may desire to keep at least for certain institutions. Hence, demonizing centralization and glorifying decentralization as the solution to all our problems would be wrong. An open and experimental attitude towards the question of different hybrids and mixtures is what the complexity of reality itself seems to call for. To paraphrase Deleuze and Guattari, never believe that a meshwork will suffice to save us."

Other perspectives on how life exists at the interface between chaos and order by Patrick Grim and Hans Moravec (both people I've had the pleasure of hanging out with and learning from):

Patrick Grim: http://www.pgrim.org/articles/vitanew23.pdf

"Evolution of Communication in Perfect and Imperfect Worlds" (with Trina Kokalis, Ali Tafti, and
Nicholas Kilb), World Futures: The Journal of General Evolution 56 (2000), 179-197.

"Boom and Bust: Environmental Variability and the Emergence of Communication" (with Trina Kokalis)
Research Report #04-01, Group for Logic and Formal Semantics, SUNY at Stony Brook.

As Grim et al essentially points out, if things are very ordered, there is no point in communicating because nothing is unknown. If things are very disordered, there is no point in communicating because things change too fast for communications to be useful. It is in the middle ground between order and chaos where communication has the most value -- where things are indeed changing, but are changing slowly enough so that communicating about them can be of value.

Hans Moravec: http://www.frc.ri.cmu.edu/~hpm/project.archive/general.artic...
"No complete theory yet explains our existence and experiences, but there are hints. Tiny universes simulated in today's computers are often characterized by adjustable rules governing the interaction of neighboring regions. If the interactions are made very weak, the simulations quickly freeze to bland uniformity; if they are very strong, the simulated space may seethe intensely in a chaotic boil. Between the extremes is a narrow ``edge of chaos'' with enough action to form interesting structures, and enough peace to let them persist and interact. Often such borderline universes can contain structures that use stored information to construct other things, including perfect or imperfect copies of themselves, thus supporting Darwinian evolution of complexity. If physics itself offers a spectrum of interaction intensities, it is no surprise that we find ourselves operating at the liquid boundary of chaos, for we could not function, nor have evolved, in motionless ice nor formless fire."

I wrote something similar to an "Advocates and Skeptics" mailing list in 2006 (inspired by my graduate studies in Ecology&Evolution -- including hanging out with and learning from Larry Slobodkin and Lev Ginzburg) and quoted here:
https://www.pdfernhout.net/a-rant-on-financial-obesity-and-P... ".. I agree with the sentiment of the Einstein quote [That we should approach the universe with compassion], but that sentiment itself is only part of a larger difficult-to-easily-resolve situation. It become more the Yin/Yang or Meshwork/Hierarchy situation I see when I look out my home office window into a forest. On the surface it is a lovely scene of trees as part of a forest. Still, I try to see both the peaceful majesty of the trees and how these large trees are brutally shading out of existence saplings which are would-be competitors (even shading out their own children). Yet, even as big trees shade out some of their own children, they also put massive resources into creating a next generation, one of which will indeed likely someday replace them when they fall. I try to remember there is both an unseen silent chemical war going on out there where plants produce defense compounds they secrete in the soil to inhibit the growth of other plant species (or insects or fungi) as a vile act of territoriality and often expansionism, and yet also the result is a good spacing of biomass to near optimally convert sunlight to living matter and resist and recover from wind and ice damage. I try to recall that there is the most brutal of competition between species of plants and animals and fungi and so on over water, nutrients (including from eating other creatures), sunlight, and space, while at the same time each bacterial colony or multicellular organism (like a large Pine tree) is a marvel of cooperation towards some implicitly shared purpose. I see the awesome result of both simplicity and complexity in the organizational structure of all these organisms and their DNA, RNA, and so on, adapted so well in most cases to the current state of such a complex web of being. Yet I can only guess the tiniest fraction of what suffering that selective shaping through variation and selection must have entailed for untold numbers of creatures over billions of years. To be truthful, I can actually really see none of that right now as it is dark outside this early near Winter Solstice time (and an icy rain is falling) beyond perhaps a silhouette outline, so I must remember and imagine it, perhaps as Einstein suggests as an "optical delusion of [my] consciousness". :-)"

My wife has her own "Confluence Framework" take on all this too: http://www.storycoloredglasses.com/p/confluence-sensemaking-...

No doubt other have though similar things. I'm wondering how far back that idea goes of life (or thought) existing at the boundary between order and chaos? Certainly it is present in the Yin/Yang ideas of Chinese Philosophy: https://en.wikipedia.org/wiki/Yin_and_yang

And my wife lists over twenty frameworks at the end of her Confluence Framework essay.

So given all that, it is no surprise that we may have to think about good design for the internet as embracing all of meshwork, hierarchy, and interfaces as Manuel De Landa's essay suggests.