Gabe, KiwiFarm started from the forum section of CWC Wiki (in fact, the name KiwiFarms itself is a corruption of "CWC Wiki Forums"), which was hosted on MediaWiki, so "not letting KiwiFarms host their own wiki" is a ship that has long since sailed.
I really fail to see how this has more abuse potential than hosting an independent wiki on MediaWiki, even if the content they host there is... not very nice, to say the least. If anything, there is more control against abuse since they would just be defederated.