A real problem is that I don't think that the process of becoming a mod is particularly exclusionary, and anyone with ambition can eventually work their way into any cartel they want through flattery and constant online presence. This sounds democratic, so the opposite of a problem, right? But it's not actually democratic, there's no votes, it's appointments all the way down. The only way you can vote on reddit is to leave a sub as a group of users, and move to another sub together, hopefully with enough posting force and shady knowledge of mod tricks to attract more incoming readers/posters than the sub you've left (by "incoming" I mean people encountering that group of related subs for the first time, either through search or through chance.)
Again, why is that bad?
Because it's so easy to game. The people who mod subs are not exceptional at modding subs in terms of fairness and cultivation of interesting dialogues, they're exceptional in their degree of motivation to be mods. An easy way to create exceptional motivation is through paying people. Another way to be exceptionally motivated is to be irrationally motivated, e.g. mental illness.
The motivation that we hope people have is the intrinsic motivation to facilitate/provide pleasure/information to others, but to also do that for free while Reddit gets rich. Not only do I think that borders on irrational, but I also think that in the fight between the intrinsic motivation to help and collaborate with others, and the simple economic utility headwinds, you 1) can't expect many people to be of the type we want, and we 2) certainly shouldn't expect them to remain for very long if they are.
And even worse, the interaction between the paid and the irrationally motivated will always benefit the paid. The paid have a mission, and if they see no means of accomplishing that mission, they leave. For the irrationally motivated, modding is the end, not the means, so if being an enabler of the paid gets them appointed or promoted, they're going to be the best enablers you could ask for.
Reddit, and most forums, need tools that facilitate real democracy (or some sort of open political process), and in certain cases the requirement to use them. This dictatorship of the appointed and the "people willing to do the work (for free)" is just M-L style vanguardism and results in rule by apparatchik.