A lot of it was attitude. The place was a tiny dump, people sometimes didn't get paid, the transmitter was falling off the air and the license was in contention, see pix at
http://www.memorypain.com/pictures.htm
So the people there had to care about the music at least to some degree and that came across to the listenership. It was a "We're not like the fake jerks on the other stations, we kinda suck but we try hard." Compare that with the slick studios and smug hipness that other stations tried to pull off, but only comes across as smarmy.
It was also a non-recurring phenomenon: They were doing the right thing at the right time. I think it peaked in the mid 80's and then there was a lull until grunge came along, and at that point the success was too much to not keep pursuing. Resistance to change that might affect their ratings has meant that they haven't changed essentially in the past 10 years.
Consider that this is also in the face of challenges from online music availability and internet communities like this one. It's very hard to program a station simultaneously for broad appeal and niche interest when today you can get 100's of online stations catering to every flavor of music, nevermind the fact that online you can find any information about any band and music movement anywhere in the world practically. It used to be that there were only certain places you could find it, say a particular station like KROQ or a magazine that had the stuff you were interested in.
I think the days of innovative broadcast radio are long over, because of corporate ownership of stations and competition from the internet. Unfortunately, i only see contemporary radio as the crap you have to put up with when you're away from your ipod, or computer or satellite radio, like in the dentists office, or elevators. Kind of like Muzak.
--
Borrowed Nostalgia for the Unremembered 80's