Now, I'm not party to what's happening inside Reddit. I don't know the logic of their decisions. But I do know a whole lot of very thoughtful Reddit users who have spaces they moderate on Reddit have explained in great detail and length ("Concision is not our brand." - a mod from r/AskHistorians explaining on Twitter about this very thing) what their needs are and why they were objecting to Reddit turning off the API.
Reddit corporately decided that supporting those affordances was unimportant, or at least less important than something else that conflicted with them.
Reddit made a design decision that changed the nature of what moderation *could* mean on Reddit. They reduced its scope. That, in turn, changed how moderators could interact with the users they moderated, and that in turn changed how users interacted with one another.
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