It needs to be understood that the culture before this happened was very different than it is now.

The mods basically owned their subreddits. Mods could do anything they wanted. You could ban someone for the color of their socks. You had full control of the CSS coding and functionality of your subreddit, so you could make it look like dogshit for the laughs and ban anyone who typed the letter L. Some subreddits got popular just for being weird like this. Whatever you wanted to do, it didn't matter. If you didn't like how a subreddit was ran you just made your own. If you made a subreddit then that was the corner of your internet to do whatever you wanted with. That was the tradeoff. You got a space in return for creating it. You didn't even need to moderate it.

After the mods got removed from their subreddits for protesting it became very clear that the subreddits were not theirs anymore. It was the first time reddit ever took actions against moderators for something that wasn't blatantly illegal.

At the end of the day it's the fundamental issue of allowing all infrastructure to be owned by any individual or small group of individuals