They have wanted to kill third party apps for a long time. Reddit's issue is that it badly wants to market "through the API" by charging for bespoke viral marketing campaigns. Simple stuff like just giving shill accounts free gold and elevated thread positions and stuff. Or on the upper end, engineering whole features like the Thanos Snap thing. That's why they spend so much time doing the cheesy little April fools games - these are tech demonstrators for their ad engineering team. The problem is that nobody is paying for this kind of marketing without telemetry to show that it's working, and third party apps really threw a wrench into that equation (in addition to the more traditional ad model).

That's a big part of where they are getting their ridiculous valuation from - their ad impression value is probably super low because their users are pseudonymous, and because the API breaks ad tracking. I suspect their equation is simply "this would be our revenue if we got Facebook rates for ad impressions."