Just as in feudalism, you see the crown trying to govern by dividing the people and making them focus on survival so that the crown’s taxes flow and they dare not challenge local landowner.
I think the reason people balk at this is because in the case of physical property, you’re talking about literally life and death. It’s hard to make similar comparisons with text on computer screens.
So irrespective of whether or not structurally it makes sense, people I think are fighting with the comparison because the stakes are so different
The king wants the kingdom to run smoothly, and the baron makes that happen. If they do a shitty job they can be removed. On the other hand most barons won't want to let things get to that point, because it's still way better than being an actual serf (assuming they're not punished/executed).
And yes, many mods do derive personal satisfaction and power and influence (banning people they find particularly disagreeable, or particularly skilled at calling out a particular bit of bullshit the mod wants to push) in their work.
I've experienced the "you're banned on a random comment for no explanation, and if you modmail and ask why you're modmuted for a month instantly with no reply" personally as well, in a large discussion sub, over something completely innocuous. Hi bizude.
The one angle I can see is selling access and priority on the sub externally. It’s clearly against the terms of service, but if done within the parameters of the sub it blends in fairly easily.
A good analogy is the private tax collectors in old Europe. The right to collect taxes would be sold to a private individual. In this case, the mods would be paying with their time to manage the rest of the sub and Reddit would turn a blind eye to paid mod abuse.