My quick Google-ing shows that they make about $100M/year on ads. So they do this and it works decently well.

However, ads at other social networks have evolved way past this level of targeting (which is a bad thing, in my opinion, but alas). Social networks like Facebook know so much about not just your likes but the people you're friends with and how much your income is and what stores you've been to and what you do on Instagram and what your age is and what state you're in and... the list goes on.

I think most subreddits are tough to monetize. What do you sell to r/funny or r/politics or r/sanfrancisco? What does r/choosingbeggars want to buy? There's a few obvious ones (diets, hobbies), but I think eeking out $100M from that is already impressive.

Plus, Reddit's audience is way more against ads than Instgram/Facebook/etc.