Reddit won the war because your stereotypical Reddit mod is a spineless narcissist who wields their banhammer as a coping mechanism for their real life issues. It's like being an internet caretaker was the only way they could gain any kind of validation.
They could very easily have overwhelmed the site and brought Reddit's admins to their knees had they collectively disabled automoderator, unbanned every user and just refused to enforce any rules (incl sitewide ones.) But the moment Reddit started threatening to demod people, they caved incredibly quickly, or tried to pull off alternative forms of protest to piss off the admins, but not to the point where they'd be immediately demodded and purged, á la AwkwardTheTurtle.
Anyone could have seen this coming from a mile away the moment we started seeing r/pics and r/videos push dumb rule changes like expletives in titles, text only, sexy pics of John Oliver, etc...
Honestly the only good thing that came out of the API protests were iBleeedOrange and AwkwardTheTurtle being permabanned from Reddit, and it's bittersweet that the hill Reddit chose to kill them on was over third-party apps.