Edit: Accidental post. Give me a minute.

You say that these subreddits are flourishing.

Because I think they are. I'm on a network that I'm not comfortable going to, but go over to /r/greatapes. You're happy with that many people subscribed to a blatantly racist subreddit? As far as subreddits and communities goes there is a thriving racist group that has plenty of subreddits.

My point being that reddit is made up of tens of thousands of subreddits.

Very few active subreddits. Even fewer active communities. So yes, I think it's closer to a mall rather than a city.

I present two scenarios. In the first, someone has been browsing reddit for any length of time (ill even concede that they could be very new to reddit) and they encounter a hyperlink to a... does that say "gasthekikes"? Wow. That sounds like a fucked up place. Definitely not going there. Or maybe they're incredibly racist already and discovery of this allows them to feed the inner circle jerk without bringing it elsewhere. Regardless, any rational person is not going to say "gasthekikes? That sounds like a cheery bunch!" There is no confusion about the contents of this sub, it is likely not misleading people into, somehow, spontaneously becoming racist.

Or maybe you go to /r/holocaust because you found some cool memorabilia. Oh wait, it's a denial group. Or you go to /r/xkcd a couple months ago because you enjoy the comic and find that the mod /u/soccer has linked racist shit in the sidebar. Or you go to worldnews and have some of the more prominent racists tagged in RES and you see them posting and getting upvoted there.

I think saying they are hidden is rather mistaken. Maybe I'm just getting the worst stuff presented to me (I am subbed to SRD after all), but there are very active racist people making actual impacts.

In the second scenario, as many people here have presented, these are incredibly niche subreddits and I think the majority of redditors are unaware of their existence. Therefore introducing your friend to reddit never "reflects poorly on you". The subs being discussed also never see any major publicity (except in situations like this where people point the finger at these places for a larger community to see).