He jokingly offered that the whole situation can easily be solved — he shuts down/sells his app for half of the “lost” money reddit would make were Apollo’s users using the official app. Win-win for both sides. The other side of the phone call misinterpreted a “quiet down” expression, which was used for the API calls from Apollo servers (serving which costs Reddit money).
It's not extortion -- the whole point of the joke is that the pricing is so ridiculous that it would be a massive discount to Reddit if they just bought his app for $10 million.
