So the whole raise-api-cost was in fact intended to just shut these apps down, and isn't to recoup costs, like Reddit is saying?

That means Reddit entered in bad faith - at that point you can't fault Apollo for reacting to that bad faith in any way really, as long as it was legal. You can't be expected to act in good faith if the other party isn't.

So, I still see no blame for Apollo folk (I don't use the app or know who they are before today)

It's bad all around, my friend.