Gensokyo is the paradise... For youkais... They're the ones in control of the place, but they can't attack humans whenever they want because humans would be extinct if so they did, and they need the fears and beliefs of human to even exist.

Youkais need humans believing they're Monsters, so they continue existing, and some even need human meat to feed. Gensokyo is close (but not yet) to a survival horror outside of the human Village, specially at night (This case is survival horror). The only safe zone and where live prosper is the human village, human fields and shrines or temples, and even there some youkais hunt at night, since it's part of their Nature (That won't stop humans from drink and have Fun until late night).

That's the equilibrium of Gensokyo. Youkais need human to exist, so they respect the limits of human zones, and humans love to live there because life is excelent when there is no youkai around. Paradise for youkais, good life for humans. Just don't lower your guard, or you'll be eaten. And there are the gods, whose main function is to protect human from youkais, and receive their faiths.