It definitely acted as a drag. Every API request was a cost without a way to make money
The real problem is that investors piled into reddit and bloated it into an unsustainable pile of death without knowing how it could make money.
Now they're squeezing it for cash and will slowly kill it as a result. But at the end of the day you can't just have a free open API because websites do cost money.
IMO. The problem is that reddit priced to kill the apps in order to serve your shitty microtransactions and track you to death. They could have had a slimmer site and a more reasonable price for the API, and that would have been fair.