Cutting off 3rd party apps isn't a cost cutting move. It has two clear benefits - firstly they can push users into the officially supported apps where ads can be shown in a more controlled fashion and metrics on those ads can be gathered. Second, it removes the ability for other companies to programmatically gather Reddit's data - this is important in the context of large language models where investors are convinced that the data sets to train the models will be valuable.

The reason reddit is hard to monetize is actually quite simple, they don't know much about their users so they can't do the high value targeting other companies do, and they have a site where it's very difficult to insert adverts in what looks like an organic way. It's easy to scroll past an advert on instagram and not realise it's an advert, it's visually consistent, on reddit it sticks out like a sore thumb so they get CPS rates of a 90s banner ad - because that's what they're selling.