Reddit has entirely failed at building their ad business, which every other major social site has done successfully. Reddit makes 1$ per user-month on ads, while Instagram makes $35. If they could even get to $2, they would be profitable. The API access issue is largely a side-show to this core problem.

The challenge for this is that targeting on reddit is harder than other sites which have lengthy profiles and interaction statistics they can use to do targeting.

An elegant solution to this problem would likely involve some product tweaks to incentivize users to tell reddit more about themselves, and a refocus on ad sales. Neither of these seem impossible to me.