The tools provided are rudimentary and not enough for many. The people here are focused on Apollo and other reader apps. But that's not what's causing the uproar. The problem is many subreddits, especially those with vulnerable readerships, can't keep mod teams who are known good actors, so they rely on the tools that use the API to handle moderation. This change forces them to either hand moderate, which for many can be overwhelming for a free, often tiny labor force, or use newly expensive software that doesn't exist yet. As a result, some well-regarded subreddits have had to close.
One close to me is /r/rtraaaa - a meme-themed subreddit for the Transgender community. Trans people have to be very careful of people trying to get in and wreck their work, and due to that finding moderators is tough. So the person behind r/traaa had to use extensive scripting and mod tools that reddit doesn't provide. With these rules, that person's tools were gonna be shut down, had to choose to not continue, and the subreddit got locked. This was a well-regarded community that won reddit's subreddit of the day, and was a place of comfort and support for hundreds of thousands of trans people.
The site is hurt by this. And while others may not be in such precarious positions as /r/traaa, how many others will eventually just fade off because hand moderating becomes too much?
This is a massive, self-inflicted wound. They don't need to do this and they're doing it for an artificial stock price inflation. It didn't provide value to the company, it just restricted other people from sharing, and will ultimately cause the site to be hurt.