Riot = PC Principal
I could see that comparison. I don't agree with it, but I can see it.
The reason the comparison doesn't work is because in this very instant, PC Principal is trying to make something a safe place that is completely outside of his authority. Riot owns LoL. They define the rules. They want people to have a good time playing this game and they want to make sure this is the case. That's their right.
League of Legends = Safe Space
That comparison doesn't even make any sense to begin with... if at all, LoL would be Reddit in this episode. LoL itself is not the safe space, because there still are people that are being dicks to other people.
However even that's not really a good comparison. Cartman put himself out there for people to judge and is disappointed when what he gets back is not as positive as he expects it to be. People playing LoL are not putting themselves out there to be judged, they're playing a game. There's no reason to discuss anybody as a person in a game.
99% of the players = Eric Cartman
Nice oversimplification. Neither do all of the 99% care that much, nor do all of the 99% report people because they can't handle criticism. Hell, some people don't even report people in order to protect themselves, but rather protect others that might be hurt more severely by that type of player. In this way, some of those 99% are actually more like PC Principal again.
1% of the players = Reality
Also makes no sense. Reality isn't the personification of the people that talk shit; it's the personification of the fact that you might not be as awesome as you think you are. Reality would be the reason that people are shit-talking.
And that concludes why your entire comparison to the episode makes no sense. The episode is about people ignoring reality. LoL's report system isn't about ignoring reality, but focussing people up on the fact that this is a game and people are meant to enjoy it. It's about punishing assholes that don't understand that they don't get to decide who is allowed to enjoy the game and who is not.
tl;dr á la Zoidberg: Your comparison is bad and you should feel bad.