They did this to themselves.
Part of it was corporate greed and incompetence by the Reddit team where they were trying to drum up numbers for their upcoming IPO. For a social media platform, member numbers is pretty much the only thing that matters, so connected with the other 2 issues, it probably was encouraged for them to ban users knowing full well that most of them would just create a new account - which of course that would let them say they have even more registered accounts when they would go to advertisers.
Part of it was various misinformation campaigns run by political parties and foreign governments to spread hate and instability. The "Smarter Everyday" YouTube channel specifically did a video about Reddit and "bad actors" a few years back on the phenomenon which I recommend everyone watch, but not sure how linking to videos is accepted on Lemmy, so I'll let you find it. The FBI keeps on warning us about "bad actors" trying to spread lies and it is only going to get more intense as we get close to the upcoming US elections.
Part of it was an echo chamber where no alternative views could be expressed without mods getting all uppity and banning users. Mods have ultimate say and there were no checks-and-balances to what mods could do. No real way to question a ban and no real way to question a mod. And the lack of alternative views is especially egregious because Reddit was obviously a very left leaning site. They were doing the exact same thing that they would make fun of right-wing media would do, namely create this echo chamber where only like-minded people were really allowed to speak. Now to be clear, I lean left on the vast majority of issues, but for fucks sakes, some of the nonsense that was accepted on Reddit would make even me cringe.
In the end, Reddit got too big for it's own good because most of these problems could be solved on a much smaller site, but Reddit got so big with so much money at stake and then it's size made it such a large target for people. It became just a toxic mess.
(sorry for the diatribe, I was going to write 3 bullet points and leave it at that, and then just kept on expanding it more and more)