I think you're right. I've been active on Reddit for years. It has always been a fractious collection of niche communities. It can be hard for an outsider to navigate. For all our complaining that Reddit is turning its back on its users, what makes us think they want to keep us around? I remember when Facebook started making changes so it could appeal to people outside of a handful of college campuses. There was a lot of complaining, but Facebook grew massively as a result.
This moment could be remembered either as Reddit's "own goal" moment where they kill their platform, or their "MTV stops playing music videos" moment where they redefine who they are.