I don't usually fault companies for messing up if they own up to their mistakes and make it right. Everyone is going to make mistakes and things will go wrong at times. It's how a company handles events when everything goes sideways that shows whether they are good or bad.
In Reddit's case, they could have acknowledged that their API plans were too aggressive and overpriced. They could have paused any API pricing changes and worked with third party developers to come to a solution where Reddit is paid, but third party developers don't have to shut down due to immediate and insanely high costs being demanded. Everyone could have walked away benefiting and Reddit's reputation (in my eyes) would have been intact. I'd likely be posting there right now instead of here on Lemmy.
Instead, Reddit decided to double and triple down. Their CEO decided to accuse the developer of Apollo of threatening Reddit and, when phone call audio proved this was a lie, blamed the developer for "leaking personal phone calls." Then, that same CEO claimed that the API was never meant for third party apps (ignoring and trying to rewrite history) and said that any moderators who kept their subreddits blacked out would be replaced. All while claiming that the moderators should rest easy because Reddit would definitely provide tool themselves to replace lost third party tools despite no sign of this happening and trust being totally shattered. (And so much more that I'm not including because this comment is too long already.)
So Reddit messing up? That could have been forgiven had they done the right thing afterwards. But now, after completely botching the response? I hope Reddit withers away to nothing and the CEO's IPO dreams die on the vine.