That means all the the CP, hate speech — and in this case, piracy — that are posted on Reddit are Reddit’s responsibility.

Of course not, from reddit's ToS: "By submitting Your Content to the Services, you represent and warrant that you have all rights, power, and authority necessary to grant the rights to Your Content contained within these Terms. Because you alone are responsible for Your Content, you may expose yourself to liability if you post or share Content without all necessary rights.

You retain any ownership rights you have in Your Content, but you grant Reddit the following license to use that Content:

When Your Content is created with or submitted to the Services, you grant us a worldwide, royalty-free, perpetual, irrevocable, non-exclusive, transferable, and sublicensable license to use, copy, modify, adapt, prepare derivative works of, distribute, store, perform, and display Your Content and any name, username, voice, or likeness provided in connection with Your Content in all media formats and channels now known or later developed anywhere in the world. This license includes the right for us to make Your Content available for syndication, broadcast, distribution, or publication by other companies, organizations, or individuals who partner with Reddit. You also agree that we may remove metadata associated with Your Content, and you irrevocably waive any claims and assertions of moral rights or attribution with respect to Your Content." --https://www.redditinc.com/policies/user-agreement-september-12-2021

They’re essentially claiming ownership of the user submitted content by doing that.

Reddit reserves all the rights to everything you post ("When Your Content is created with or submitted to the Services, you grant us a worldwide, royalty-free, perpetual, irrevocable, non-exclusive, transferable, etc., etc.), but you alone are responsible for it ("Because you alone are responsible for Your Content, you may expose yourself to liability if you post or share Content without all necessary rights.").

Not a lawyer, so not sure how enforceable reddit's ToS is, but the TL;DR (as I read it) is "you're responsible for everything you post; reddit owns it."

increase is the protest posts

Posts are posts, clicks are clicks, all grist for the mill. From the article:

"traffic is up in subreddits expressing their discontent with photos of Oliver. Traffic to r/pics, for example, is up 564% compared with last month, while traffic to r/Aww is up 152%"

pretending they were community-moderated.

Unless you remember electing your mods, "community moderated" simply means "we don't pay the jannies, they literally do it for free lol!" It was never about the "community" having a voice.

And it works, see /u/delcake's comment.

It never did, that's the point. Ran at a loss from day one. Possible (likely?) the funding's drying up, so might be a sink-or-swim moment for them.

The size (256x256) might be too small. Here's 512x512, and here's the same thing, but 256x256.

double post, sorry, delete doesn't seem to work

forced to moderate against their will

How does one force unpaid jannies to keep working for free? Asking for a friend.

Yeah, but what’s Reddit without mods and users?

Not much. OTOH, from the financial perspective, reddit is nothing now. In all its years of operation, it's been relying on founding rounds to keep its head above water, yet to show a profit :\

Night of the Long Brooms

But he can’t expect the mods and the users to stay

I doubt he does, hence this shitstorm

once everyone is burned out on Johnny O?

Dunno, but doubt users currently posting & clicking maymays of the now will get bored & come up with a new forms of 'protest' (which, you guessed it, will also involve posting, scrooling & clicking on reddit).

keep the sub open

Reddit wants content and clicks, 'site engagement,' which r/piracy provides. It couldn't care less if you post John Oliver pix, the Unabomber manifesto, or plot cunning ploys to oust u/spez -- 'long as you do it & do it on reddit.

pictures of sexy pirate john oliver

Why would sexy pirate john oliver pix in r/piracy bother reddit more than posts about piracy?

piss off the mods and the users.

Indifferent to reddit, always assumed it was an ordinary, profit-driven business that happens to host some turboautist tech subs that i like; kinda annoyed by the jannies.

this won’t improve anything.

Dunno. In spez's place, i'd probably anticipate the pushback & appease devs & jannies until plan B was firmly in place be more diplomatic. Then again, know nothing about running social media sites or taking them public.

OP, by using reddit,

"You retain any ownership rights you have in Your Content, but you grant Reddit the following license to use that Content:

When Your Content is created with or submitted to the Services, you grant us a worldwide, royalty-free, perpetual, irrevocable, non-exclusive, transferable, and sublicensable license to use, copy, modify, adapt, prepare derivative works of, distribute, store, perform, and display Your Content and any name, username, voice, or likeness provided in connection with Your Content in all media formats and channels now known or later developed anywhere in the world. This license includes the right for us to make Your Content available for syndication, broadcast, distribution, or publication by other companies, organizations, or individuals who partner with Reddit. You also agree that we may remove metadata associated with Your Content, and you irrevocably waive any claims and assertions of moral rights or attribution with respect to Your Content." --https://www.redditinc.com/policies/user-agreement-september-12-2021

It’s much more cost efficient to provide an API

Apps using reddit's API (e.g. Apollo) don't display reddit's ads. Imagine you run a bar & serve free beer. You can do this with this one simple trick: constantly spamming ads on every TV (display panel) in your bar. Advertisers pay for the beer & your overheads.

Along comes a guy with a garden hose, sticks it in your keg, and starts siphoning your beer to the bar he built across the street. His place is much better than yours, the alcoholics don't have to watch ads to get drunk.

wat do?

web scraping which is objectively more resource intensive

Pretty sure app devs are not not_scraping out of concern for reddit. If they could, they would (I know I would).

Reddit provides the beer, but in reality it doesn’t.

OK, substitute "kegs" for "beer." Kegs (servers) & staff to run them costs, and reddit wants to stop subsidizing the bar across the street (3rd-party apps). Honestly see nothing wrong with that. Was cutting off the subsidies in this fashion a good business decision? Don't know, bad at money stuff.