I agree that there's still value in private subreddit style communities, but I believe that that could co-exist with tags.
Ultimately it's a tradeoff. Without tagging you have to figure out which subreddits to post in, potentially cross-posting in tons of different subreddits, fragmenting discussion. With tagging you only need to post once, but a single tag feels less like a "community". I guess personally I never really felt any real sense of community from any subreddits (unlike the old phpBB forums), so the sacrifice made sense to me to keep discussion in one place. But this would only work well if the site can actually foster balanced, intelligent discussion and debate across the spectrum (otherwise just becomes the PC hivemind dump that is the mainstream subreddits like /r/politics), which Reddit has proven incapable of over the last decade - ending up fostering extreme communities like /r/TheDonald as a backlash to the PC hivemind + censorship in the rest of the site.