If I wrote on my blog that you eat hobbits, my blog is a primary source for "Ken claims Mr. Dalton eats hobbits", but an unreliable self-published source for "Mr. Dalton actually does eat hobbits". The former is an event that happened on my blog. The latter is unreliable info about a living person.
Absolutely true.
But isn't that where original research comes into play? What is the purpose of quoting ken's claim about Dalton eating hobbits? If it's in an article on Dalton, in an effort to show that Dalton might actually eat hobbits, then the problem is it's a fringe theory, because Ken isn't an authoritative source. If it's in an article on Ken, to show how dumb Ken is for thinking Dalton eats hobbits, then it's original research. Don't quote Ken to make Ken look dumb, quote an expert who talks about how dumb Ken is.
The quote in question is strange, but this sort of stuff comes up all the time. Consider political figures. It's really easy to come up with a list of quotes from them that make them look stupid, or smart, or hypocritical, or whatever, but shouldn't we instead be looking for analysis from experts saying that they're stupid, or smart, or hypocritical, or whatever?
Most people who Google someone's name and come across a Wikipedia page about them will be using Wikipedia as a source in the latter, unreliable, way.
I'm sure I understand your point. People using sources badly isn't our problem...