1. First, look at the incentive structure for being a mod of a large subreddit: it's a ton of work, with people constantly bitching at you, for no compensation. The vast majority of people with a life are not going to want to do this. So of course it appeals to people who can power trip off it, and I can't see those dynamics really changing. I do think that reddit should change the rules to make it easier for particularly egregious mods to be voted out by the subscribers of a sub, but that's a relatively small change. For example, some of the r/lgbt mods were notorious assholes, which is why some people split off to make r/ainbow. Should be easier for subscribers to essentially "impeach" shitty mods.
2. "If it actually impacts revenue the admins will just ban a few dozen mods and the protest will, effectively, be over" People keep saying this, but I doubt it. The vast majority of reddit users, at least in the subs I've seen, support this - a bunch of the subs even had polls to ask what they should do. It's one thing for the admins to remove mods who are acting against the wishes of most is a subs' subscribers, but I think it would be total chaos if they tried to replace mods specifically to get their way WRT to the API changes.
At the end of the day, reddit is nothing without it's community. Company management can only go so far before it kills the goose that laid the golden egg.