Well, reddit clearly doesn’t see that as an issue. In my opinion, the best way to force someone stubborn to accept the reality is to make the what-if to reality, and sooner or later the stubborn individual would either be replaced or kill themselves (Maybe not literally but you get the point).The issue is not replacing bad mods with another bunch of bad mods: that's pretty easy to do and Reddit can literally do that overnight.
The issue is that good mods are far more scarce and far more valuable and that alienating them will likely also alienate the most valuable contributors to the site.
Reddit can ditch bad mods by the hundreds easily but they need to be much more careful about not alienating those who bring actual value to the site, since they can just as easily bring that value somewhere else and have a competitor of Reddit gain a lot of momentum while Reddit loses it.
Sometimes, burning the world to the ground is the way to go.