Because it was never for the "privately owned company" that they were doing the work, it was for the communities. Reddit was just a site where people could go to talk about their favorite subjects or discuss news posted by the users, reddit the company never did anything to improve the site and often made it worse instead.

If reddit is going to make claim that the communities aren't community-run and are instead owned and regulated by reddit, then mods deserve actual wages and employee status.