The loss is that those people might not be generating content, but they do have eyeballs and those eyeballs aren't looking at the content generated by the monetizable people. That means they're also not looking at the ads Reddit wants to serve to users in exchange for payment from advertisers.
You're right about the era of free (well… really, really cheap) money being over. I think we're going to see that social media as we know it (which has _only_ existed in the era of cheap money) isn't nearly as sustainable without a bunch of VCs willing to shovel money into a furnace in hope for unknown future returns. There's going to be a contraction.
