He's a fucking idiot or a liar. I'd believe either. Or both.

The entire point of having this free, public API is because a free, public API can be monetized, and content scraping cannot. If you are offering a free web app, and you don't have a free, public API, someone will create scraping tools to do it. So then, instead of spending money maintaining a revenue generating API, you spend money playing cat and mouse with content scraping bots.

The fact that reddit can't figure out how to push monetization over that API has nothing to do with third party apps, and everything to do with the site having shit leadership.