It should be pretty simple: the user generated content are volunteered by the users for free on reddit, therefore the content should belong to the users.
Same thing as with AI, if an AI model is trained with everyone's data, then the AI model should be open and available to everyone.
Reddit administration thinks the site is too big to fail. Lemmy isn't a real competitor to them because the decentralization of federation means that joining an instance and trying to navigate the fediverse is a bit too complex for most people. The reason why massively populated social media sites took off is because people like having everything in one place where everyone else is.
What I could see happening is a well-funded startup creates a fork of Lemmy that they use as the basis for their instance and they can customize and develop as they see fit. This instance would be accessible to everyone already on Lemmy, but they could offer one centralized alternative to Reddit where new users don't have to think about what they need to do to join.
I'm sure that if Lemmy picks up critical mass, it could lower the bar for most people to be willing to jump through the extra hoops. Ultimately federation solves the chicken and egg problem that any social media startup has.
Which is fine, ActivityPub is an open protcol. You don't even need to cleanroom, its all there. The AGPL is a shield against corporate interests, given how things are going that's a much needed feature.
That's not the end of the world, though it does mean that a competitor could always start using it. I was going to say just use Lemmy but a major site would probably want to have their own fork for stability so they're not at the whims of someone else.
They could probably use an open fork for a while while also developing their own software that would be compatible and then seamlessly switched out.
Typical corporate greed in that sense. It's stupid but I'm not at all surprised by that attitude.
The part that even if they were morally right in that sense... it's already too late. This is trying to close the barn door not just after the horse left, but after the horse already ran off and made it two states over. There's definitely value to LLM in having more data and more up to date data, but reddit is far from the only source and I cannot imagine that they possess enough value there to have any serious leverage.
Reddit would/will survive being taken out of internet search results. Not without costs though: it will arrest their growth rate (or accelerate shrink rate, as appropriate) and make people less interested in using the site.