I can only surmise from all the posts and interviews that Christian has done post that call but it simply seems like he tried calling their bluff on the $20 million number and/or was fishing for a buyout. He found the number ridiculous, the reddit admin told him that this number wasn't server costs but opportunity costs for lost revenue, Christian decided to poke the bear and ask if instead of him paying them 20 million dollars a year, they could buy him for 6 months of that "lost revenue" and then make that revenue for themselves. He was offering to be acquihired and was simultaneously calling their bluff about the API pricing

The reddit person seems to have thought that Christian was threatening them in some way??? I genuinely don't know what Christian could even have threatened them with. It seems to me they didn't understand the power dynamic at all of a small solo app developer talking to a massive corporation. Maybe they thought he was threatening simply shut his app down for that amount without telling anyone which might have avoided this ruckus? I'm sorry but I genuinely cannot fathom what they thought was going on

1 and 2 are different in that clearly the admin thought Christian was making a threat to their business whereas he was merely calling their bluff and possibly opening himself to business negotiations if reddit actually thought his app was worth that much. Through all this it feels like Christian did not communicate what he wanted effectively (though this seems to have been a throwaway line in a much longer call that got misconstrued gravely) and the admin was simply not equipped at all to handle negotiations

Reddit said the majority of the lost revenue was in opportunity cost (money they could have made from those users if they were using the official app), not the literal cost of maintaining the API. So the idea is that they would buy the app, then could serve ads to those users (or however else they monetize users on the official app) and recoup the opportunity cost.