Here's a thread that led to people's hate of imgur: https://www.reddit.com/r/iphone/comments/46cjo5/i_just_want_... It was really annoying on mobile.
They seem to have spent their good will in exchange for crappy auto-playing sound ads, incessant mobile-app install prompts, non-obvious URL resolving rules, and browser hijacking navigation. I don't think this was done in bad spirit, they are a growing company with investors to report to. It seems like they forgot what made them popular in the first place and makes me wonder if user experience was more of a company principle if they'd be in this predicament now.
It makes total sense that reddit would want to not only improve the image content sharing experience but also acknowledge that imgur is indeed a competitor with it's now own thriving community. It has been for a while and now reddit is treating it as such.
In retrospect this whole thing looks as inevitable as Twitter pulling the rug out from it's third party developers.