This requires explanation. If they staff the moderation in-house, costs will rise significantly and there is no chance they can ever profit. The people with the time, expertise and patience necessary to mod will know of alternatives. Mods are niche niche.
But the bigger issue that you allude to for reddit here is that they aren't pulling off the band-aid in one go. Once the apps die, they still need to kill old reddit and RES, they still need to end NSFW. Each time they do this the federated clones will be stronger, and each time more and more will jump ship.
This requires explanation. If they staff the moderation in-house, costs will rise significantly and there is no chance they can ever profit. The people with the time, expertise and patience necessary to mod will know of alternatives. Mods are niche niche.
But the bigger issue that you allude to for reddit here is that they aren't pulling off the band-aid in one go. Once the apps die, they still need to kill old reddit and RES, they still need to end NSFW. Each time they do this the federated clones will be stronger, and each time more and more will jump ship.