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Counterpoint, the quality of moderation was already pretty patchy, and the quality will continue to decrease. The mods who left are the ones with the most integrity. In my opinion, stepping down in protest is a sign of integrity, which is a key trait of a good mod.
The conclusion that the replacements will be worse is just a statistical average taken at face value, so who knows for sure. It isn't an ironclad conclusion, but I think it's a bit better than mere wishful thinking.
I think terms like "better" or "worse" are a bit misleading in this case.
Suppose 10% of all newly appointed mods are enough of a good fit for reddit & the community to fulfil the role indefinitely. The other 90% are shit, but will either get sick of it or be exposed as shit within a few months. If you keep rolling the dice, while keeping the less-shit ones then over time the quality of the pool will improve.
I think we also need to acknowledge that reddit is changing. Perhaps you and me prefer the way it was, but there's plenty of people will be just as happy or happier with whatever it becomes. In some ways maybe newly appointed mods can be a better fit, or able to grow into whatever it is that reddit is becoming.
So while undoubtedly the quality of moderation in some subs will take a nose dive, and may even cause some subs to die, I'm not convince that it will be a significant detriment to reddit's advertising revenue in the long term. Note that I'm not saying the user experience will ever improve - I think that's dead.
With all that in mind, I just can't imagine being a reddit mod, and it's hard to believe reddit mods saying that they do it for the community. Volunteering for things you care about is great, but you need to keep some dignity.
Do you think that's likely to play out in their favor by IPO time?