If reddit simply wanted to sustain its userbase, it'd be in a much better place.

That's fundamentally the problem with the internet (and corporate culture as a whole, really). When a site takes off, the expectation isn't to sustain the status quo, it's to continue that growth. It inevitably reaches a point where maintaining exponential growth becomes more and more difficult, but even more profit still needs to be made. They find ways to squeeze every last goddamn drop out of it, almost always to the detriment of the users, the user's experience, and everyone's privacy.

The never-ending growth model is fundamentally the problem here, and that's why I completely agree with you. Like you said, "This requirement is incompatible with profit motive."