I’m not sure I agree, it is about the API pricing because that is what the Mods are objecting too. The article highlights the surprising outcome that Reddit feels it is better to threaten mods than back down on a clearly very unpopular decision.

Is this path really better than changing the API (and API terms) to make third party apps include their ads, plus perhaps a nominal cost to cover the expense to rhem? I don’t claim to know enough of the details, but this move doesn’t look likely to improve Reddit, or Reddit’s value in the short, medium or long term to me.