Way too complex to navigate that minefield, lawyer fees will be a big hit on the budget of any reddit challenger.
Moderation: True, that's hard. But maybe piggybacking on HN's karma points could solve it?
Network effects: Do we really need many users to make something useful?
What are those places?
Mastodon is a good example and counterexample of this trend. Gab was the biggest Mastodon instance, largely populated by the kinds of people pre-Musk Twitter banned or limited (and their followers.)
But the second (post-Musk) wave wasn't people who got banned, it was people leaving because they didn't like Musk and/or his changes to Twitter. And Reddit's own userbase came from Digg in much the same way.
Imagine if Mastodon had been easy to migrate to, Twitter would have collapsed like a popped balloon.
Reddit has a natural administrative/scalability partition boundary though, which makes federation much easier. I think a federated reddit would work better than Mastodon has.
To the point that quite a number of subreddits that have been banned, or that have been voluntarily shut down, have already set up their own clones on their own domains. t_d, drama, and fds are three notable examples that I can think of off the top of my heads.
* Hosting costs. Reddit was very lucky to have imgur pick up a lot of its bandwidth in its early days, but free image/video hosting sites are cyclical: absent a benevolent billionaire, the costs will rise with popularity, and the site will eventually need a source of revenue, which will introduce friction and start its inevitable decline in popularity.
* Moderation. Always a highwire tightrope act. Most Reddit spin-offs of the past several years have been focused on minimizing moderation, which ends up attracting people who tend to get banned from other places before the site gets a chance to form its own identity and pick up steam.
* Network effects, which are basically a lottery. You can have a scalable service with great UI, and a solid moderation story, but you still need to get lucky and catch lightning in a bottle to take off. This is common knowledge, which makes it even harder to justify starting to develop or use a new social medium.
Personally, I like places like HN, which focus on good moderation without trying to scale up. We are blessed to have dang, but if the site were structured more like Reddit or a forum with different boards, I bet it would become unmanageable very quickly.