They serve up a ton of ads, which is also gradually driving people from Facebook. But if reddit served as many ads, it would be completely unusable.
Ads make the signal to noise ratio degrade. That works for spending a few minutes on FB, skimming to see what's up with friends or family, but not for reading long forum threads on reddit.
Facebook doesn't just serve ads. They have high quality identity and market data on their users that is very appealing to advertisers looking to spend their money on specific targets. I don't think reddit is currently able to supply advertisers with data of that quality. I assume forcing people to sign up with an email or use the app instead of the website are attempts at bridging that gap.
Ads make the signal to noise ratio degrade. That works for spending a few minutes on FB, skimming to see what's up with friends or family, but not for reading long forum threads on reddit.