Sotira did not found DeviantART. It was founded by Scott Jarkoff, who asked Angelo to take over as CEO. After Angelo did, there was a coup and Jarkoff and Matteo, the cofounder, were both involuntarily terminated.
Since then, Angelo has done nothing but ruin DeviantART, which wasn't a good site to begin with. Feature-wise the site stagnated: instead of focusing on new ways to handle artists, Angelo decided that the best thing to do would be to fake a community by designing a Digg-like news system and a Collections system that, frankly, nobody understands, an AJAX smiley system that makes three separate server requests just to load a set of smileys (and which locks down the comment box when you do so), a buddy list of online friends despite the lack of available chat functionality... the list goes on and on.
DeviantART is so ineptly run that they need to put advertisements splashed everywhere despite also offering premium memberships and selling artist prints. Despite all these ads the site is incredibly slow, possibly because Angelo's team shows no inclination of wanting to optimize the systems they're running. It's a failure both of programming and of design.
Further gripes about DeviantART:
http://unalone.net/files/2910825.pdf (LONG - this is a 50-page essay that I wrote when Aviary first launched that compares the two sites, and it takes a lot of the DeviantART features and analyzes why they fail)
http://unalone.tumblr.com/post/74420673/deviantart (Basically talking about what a negative impact DeviantART has on would-be-artists - contains self-promotion so feel free to ignore as propaganda)
Jarkoff has written repeatedly: http://jarkolicious.com/probes/2006/10/23/times-line-rider-a..., http://jarkolicious.com/probes/2005/08/07/deviantart-a-littl..., http://jarkolicious.com/probes/2005/08/25/deviantart-a-littl..., http://jarkolicious.com/probes/2005/08/03/involuntary-termin...
I also don't like these stories conceptually. There's no incentive to provide a reasoned story: if your point is that these people are young, then they're perfect and can do no wrong. The tone of the article in general seriously irritated me.
Some early googling turned up DeviantART and ConceptArt.org. I've added Aviary to the list, but any other artist community sites would be great to know about.
The problem is that from what I know, there still aren't many good art communities, if any. The best artists all have their own sites for that reason: there's no good common grounds.
That's a wide-open, exposed field for possible startups: even Aviary focuses more on hobbyists and doesn't have plans to create more polished portfolio pages, from what I'm aware. It's one of those things where I figure if nothing's happened three years from now, I'll give it a shot myself: it would make a lot of artists very happy.
But is it a failure as a business? According to Wikipedia:
As of February 2009 the site consists of over 10 million members, over 75 million submissions, and receives around 100,000 submissions per day. The domain deviantart.com attracted at least 36 million visitors annually by 2008 according to a Compete.com study.
That all happened before 2005, with Jark. The site has been on a plateau for several years: no growth whatsoever.
I have an admittedly biased point of view. I'm developing a site that's somewhat of a competitor; I interned for Aviary, which is another competitor (though it's much more professional). DeviantART is a huge site, but that's largely because when you think of art online, there's no other site to think about. People have so completely abandoned focusing on artists that there's nothing really dedicated for people that paint, say. As a result, if you want to put your stuff online, there's no real other choice. It's a terrible site, but it's the only site.
My anger at DeviantART stems at the fact that it calls itself an art site, when it's not. It's a social site. The focus is on smiley faces and talking and drama rather than on people who want to make good stuff. Angelo Sotira embodies that: he isn't an artist at all, and yet he runs the site. He can't write, he can't draw, he can't take photos. His online journal looks like the journal of a bright-but-immature 20-something kid. He's thoroughly unprofessional, bans users who dislike the stuff he does, hides moderator corruption, and generally is just an awful CEO.
I used DeviantART when I was younger, thinking it would make me better. I was lucky because at a really, really young age I got to talk to a professional editor and she really got me on the right track, writing-wise. Five years later, there are people at my college, sitting in the classroom I'm in now, who are less progressed as writers than I was at 14, and that's because their writing circle is DeviantART, and that leads to no growth.
But that's a totally different argument. As you pointed out: I was wrong regarding the site's earlier growth. I still don't think that was the result of excellent business decisions, I just think the site itself is in a good niche. And it bugs me that the article cites Angelo as the founder, when he wasn't, and it bugs me that they praise the site he made, when it's so thoroughly reprehensible.
Now I've had a chance to talk to a lot of different people in charge of big sites, and his style stands out in even worse relief. The Flickr guys will talk to you if you write them; Marco from Tumblr emailed me a few times in response to questions that I had. Even people from more rabid community sites, like the Gaia Online fellows, would write back and sound like guys who knew what they were doing, even if they were a bit silly or a bit busy. Meanwhile, the DeviantART team (not just Angelo, but pretty much every prominent administration member) is arrogant and hostile and in two cases, writing messages to them asking them about a feature resulted in their threatening to suspend my account if I continued writing. It's atrocious.
There's a handful of companies doing this now, but none of them have really captured the market yet.