What an absolute shit show. Reddit is objectively in the wrong here. Like Christian says, I fully agree that Reddit should charge for API access. But this is ridiculous and is simply a transparent (likely successful) attempt to kill 3rd party apps and streamline the "brand."
Ultimately, this is symptomatic of trying to monetize a service that either a) isn't something people want to pay for, or b) monetizing it in a way that kills the spirit of the service. A common problem with the internet, sure, but also smacks of a complete lack of creativity on the part of the suits. If this were an issue of maintaining Reddit's longevity, they could find a way to have their cake and eat it too. No, this is a clear attempt to raise their value before their IPO, so that a few suits can jump ship when the value is at its highest, as we've seen time and time again. And they're too stupid to see that their efforts fly in the face of their obvious goal.
Reddit got popular for lots of reasons; a big one was that it was fun and still felt freewheeling in a way that the increasingly corporate internet wasn't. It was still anonymous (if you wanted it to be), weird, communal, much like the early internet that was seemingly disappearing before our eyes, and yet still decently mainstream albeit in a nerdy way.
Something changed when people started referring to it as "social media." I've always been confused by that label. It's "social," yes, and I guess it is indeed "media," but it's not "social media." It has little in common with Myspace or Facebook or Instagram. It has much more in common with internet forums, albeit with an IMO better interface (the tiered comments design is simple and brilliant, much easier to navigate and keep parallel conversations going than your standard in-line forum). We don't call forums "social media" -- that label is quite loaded and comes with a number of connotations.
But alas, they tried to monetize it via the same model that all other "social media" is monetized -- with ads, clamping down on the weird, etc.
This kills the Reddit. Remember Tumblr?
My prediction? Reddit is going to limp on, but as even more of shadow of its former self than it's already become. It will become the Facebook equivalent of this kind of "social media" -- a distinctly non-hip, safe, boring, corporate place, with an ever-aging user base. One day it will be sold for a comparatively measly fee to someone social media giant that doesn't even exist yet.
Those who long for the Reddit of old will go off to other places. I myself already spend most of my time on HN anyways -- it's basically everything I want from Reddit and none of what I don't. It's got the "old.reddit.com" interface, doesn't require a mobile app to use on a mobile browser, is information-dense, clean, fast. Content-wise HN and the tech-related subreddits I frequent have a huge amount of overlap both in terms of content and I presume users. For everything else...meh, I can take it or leave it. The hobby subreddits are great, the /r/all comment threads for huge events are great, but all that was the cherry on top, not the cake.
I'll probably just continue to mostly spend my time here, and check out, say, the various fediverse clones of Reddit. But just like Mastadon with Twitter, it'll be too fragmented to truly replace what everyone is jumping ship from.
It's sad, but I suppose this is the way of all things. It's new, it's fun, it matures, it's stable, then it decays. So it goes.