I did a quick side project with my sister on a UI with similar goals. We called the documents, "variable level of detail documents"—demo here http://symbolflux.com/lodessay/
Mercury Reader (formerly readability) https://mercury.postlight.com/reader/ and Slashdot both belong as prior art. Slashdot has had the ability to change length of comments for a long time.
Also: we started a wysywyg editor to make these 'nesting docs' here: http://symbolflux.com/nestingdocs/