I moderated a mid sized sub for a while. Around 100k users. It was a hobby I was into and I figured may as well moderate because I was spending a lot of time on the sub anyways. It also let me put together some community events which were always fun. Once it stopped being fun and started feeling like a job, I left. I never really thought about it as doing free work for reddit and more helping community building for a hobby I had. People do it for all sorts of reasons. The “power mods” are really the issue.
Because there are still some great communities on Reddit that don’t exist in the same way elsewhere.