I've moderated some forums in my time.
The fact is the folks who REALLY want to be moderators, are almost always the folks who should not be.
When I moderated a large gaming forum years ago, anyone who lobbied too hard was automatically out as a moderator candidate, the pattern was just way to clear that the folks who want to moderate badly, are the worst. It was amusing as when you denied those folks, they usually did something terrible... (forum rules wise, not really terrible).
I agree, one of the issues with Reddit is that there is a chain of moderators who bring their buddies along or seem to horse trade moderator duties. I've seen more than one sub have issues after these full time mods show up as moderators in forums they don't seem to have participated in (yes I know they use alt accounts) and behave as if they do not understand the forum.... or just don't actually do anything and the forum falls prey to the usual low effort memes, "hey look at this pic" and such issues.