I agree that shutting down a site with that amount of traffic would be a shame. If you were to take it down, your visitors would end up finding another script archive site, and probably get lower quality scripts in the process (there's a chance they wouldn't even be perl!).

I think footpad's approach would be far better. Focus on some of the more popular scripts and try to improve them. You might want to consider talking to the Not Matt's Scripts people and see how they're doing. I'm sure you'll also be able to find some help with the articles from people around here.

Best of luck :)