My guess: AlienBlue was developed with power users in mind and this new app was developed with showing people ads in mind.
A major re-design gives them the excuse to remove and never re-add many features and tune the app for a different type of user and a different type of interaction.
AB was developed by one person (who is still on the app team) - it's possible AB isn't suited to having a team work on it, or they want to follow new best practices (eg. Swift)
I hope there continue to be legitimate substitutes. I still remember when Twitter decided to add the key limit to their API shortly after releasing their official mobile clients, for the sake of "maintaining a consistent user experience" or something like that.
On android, 'reddit is fun' is great. Because of it I was never wanting for an official app and I knew that whatever they released officially wasn't going to be that good. Not out of the gate anyways. So far the release of the official app has just been mildly inconvenient for me, 'reddit is fun' had to be slightly renamed and the icon changed. But whatever.
Yes, there have always been (and always will be) software bugs, but it was at least intended to be used as shipped. We didn't release software with the stated intention of "ship it now, we'll patch bugs and finish features later."
I wasn't expecting it to immediately have every single feature that AlienBlue had. With the amount of time they had been working on it (and the number of developers working on it), I was expecting it to have at least half of them.
If you replace an existing app with a new one the new one better be at least as good and feature-complete as the old one. Remember that you can never take away features once they have been rolled out.
This is one of "Things You Should Never Do" http://www.joelonsoftware.com/articles/fog0000000069.html