Yeah, that's the big issue. There's no incentive to want to be a public unpaid moderator, except arguably bad ones. Someone wanting to run for power creates and runs some of the worst communities out there.

For better or worse, the best moderating schemes on a moderately large group is via a paid position. At least there a mod has a "boss" that you can hope to appeal to should they abuse their power. May not always work but it's more security than hoping an admin pays attention to a subreddit's drama.