This subreddit was created by an unpaid moderator, not a co-founder of Reddit.
Subreddit of the year is also a user poll, so that doesn’t necessarily imply endorsement by company leadership.
You also got the year wrong, it won in 2008. It was shut down in 2011.
Reddit does deserve a lot of criticism for knowingly keeping the sub and other sketchy ones around, supposedly in the name of “free speech.” But your statement is not accurate.
Whether this policy was naivety or more of a quiet but direct endorsement is up for debate. Obviously, Reddit had ample opportunity to take down this and other deplorable subreddits. They were not ignorant of their existence. At best they slow-walked the process, at worst their tolerance implied endorsement.
Sources:
https://en.wikipedia.org/wiki/Controversial_Reddit_communiti...
https://www.gawker.com/5950981/unmasking-reddits-violentacre...
However he defended the place publically, and gave an award called Pimp Daddy to violentacrez, which shows some level of consideration and recognition by the now CEO of reddit.
looking at it with the hindsight of time, the "free speech" defense rings a bit hollow considering the communities they were protecting at the time
they also removed third party apis and mod tools before an ipo. If one had bad thoughts they would think increasing their own app numbers and reducing tools to remove bot activity would be unethical ways to bolsters user counts before a sale. But that would not happen