I'd say what went wrong was nobody did anything meaningfuk or cared. Nobody put their money where their mouth is and deleted their accounts, and staying off the site for 2 days was too much to ask of >80% of the users.
The Mods closed a few subs but didn't themselves do anything meaningful. They should have let reddit replace them if they actually cared. They should have moved their community to lemmy or kbin. The ones who did sick it out I'm grateful for, the rest cared too much about their own pride to bother trying to keep the admins in check.
Overall the reddit userbase since the pandemic are mostly entitled whiners who don't really give a shit as long as they get their twitter and TikTok reposts. There's literally only one piece of OC on the frontpage of reddit right now. There's not much value to going there anymore.
I'm done with Reddit, and honestly I haven't missed it. My time is now more full of hobbies and actual reading, I'm better off for deleting it.