Third party devs have said they don’t mind a reasonable API rate, but both the cost (~$20 million/year just for Apollo) and the timing (30 days to make the pricing changes, update the app, work out bugs, get Apple to approve it, etc) were just stupid.
It was done this way to kill the third party apps, period.

1. If Reddit didn’t insist on hosting all pics & videos themselves, they would probably already be profitable.
2. If the API pricing was reasonable, users & third party devs would happily pay it.
3. If Reddit had given more time (3-6 months) for third party devs to implement changes, then they could and would do so (assuming reasonable API price).