They could have easily created pricing tiers which would have skimmed the maximum profit off each. Likewise they could embed ads in the API as a condition of access (even granting ad-free access for premium members).

For whatever reason they chose not to do these things. I'm leaning towards incompetence rather than malice.

Agreed they want to kill alternatives. I just think that done right they could make more money than now by not alienating part of the user base.

Cancelled my Reddit premium renewal (it's 10 months away but still...) and donated with the link above.

I'm not sure if I'm patient or just slow. The mould seems to fit though.