No. You can create as many different blogs as you like and you can give each user permission on his own blog, then you could aggregate all the blogs together using the Feed Manager feature. This way each user can only add/edit posts in their own blog.
However, the blog is a powerful feature, you should not let just anyone who registers on your site use it, it is designed for trusted users. It allows rich media, javascript etc which can be used for good or ill. A bad person can do very bad things if you let them embed javascript into your site.
Best,
Joe