Reddit runs on a shoestring for an audience that big, and still loses money. As I understand Victoria's position, a full salary went to hand-hold celebrities during AMAs. That's a lot to spend for a portion of the participants in one subreddit (I don't think every AMA got that support).
Given limited resources, that meant that a salary's worth of resources were not available to help pay a software developer who could be working on better mod tools--which would benefit every mod on the entire site.
That might be the entire story behind Victoria's dismissal: reallocating money from hand-holding to software development. Which is more in line with the typical Silicon Valley tech company way of doing things. Facebook and Google and Twitter spend a lot of money for software development, so they don't have to spend much on hand-holding.
> It isn't the administrator of Reddit that attracts celebrities to the websites. It isn't the administrator of Reddit that create the quality content that is in subreddits like /r/askhistorians, and /r/science and all the other serious subreddits. It is the users and superusers, all self-managed by the moderators.
Reading Pao's post, it looks like that was part of their decision. Since the value primarily comes from the users and mods, let them organize and run the AMAs from now on. Then the company can use that money to make better software.
Note: this is my own speculation based on public stuff I've read.