I find this fascinating (in part because I see that tension -- features that, at least initially, help the company but make the product less usable to the actual users -- in other products). The long-term fate of apps filled with features that users dislike is surely not a good one...
Users are not the customers. They are the product.
The customers, ad agencies, are being listened to and their feature requests are implemented.
Imagine a user like a cow, the person deciding is the human who eats the burger, the cow does not decide how big its house is. Similarly users on reddit do not choose the app layout for their convenience, ad suppliers do.
Yeah, that narrative works for lots of products. But humans aren't cows and can walk away, and it has happened before. Arguably, it's happening now on Facebook and Twitter. Reddit will just be another dying product idea.
Most redditors use the official app and don't care about the ads and bad experience. Most PEOPLE don't care enough about ads to install free ad blocking software, even when they know about it.
The problem here is that most Reddit moderators care very much about the bad experience, because it makes their unpaid jobs more onerous. And Reddit can't function with moderators.
