You make some good points but if there's one fatal flaw these big tech CEOs and their boards seem to have it's hubris. Reddit doesn't have a moat and it also doesn't have data that's amazingly interesting. This may very well be part of a power play by Huffman but he's forgotten the only two things that really matter at the end of the day, which are quality and volume/scale. Screwing his mods hurts him on both of those counts, because bottom line is it will result in people leaving and putting their energy into rival projects. Tech giants can and do fall and it almost always happens because they lose sight of those two things which matter and get embroiled in their own internal political navel-gazing BS. If he is sacrificing quality and scale for anything he's slowly signing the death warrant of the business he manages.

Mind you this may even be intentional - "let's move this business into the maturation phase where it continually gets shittier and our margins get higher until it collapses and we sell it off or something" is a completely normal and regular strategy, happens all the time, businesses exist to make money for their owners. All businesses go through three phases, growth, maturity, and decline. But as a user or consumer if you see it moving toward the end of the cycle it's usually in your best interest to get the hell out sooner rather than later.