Reddit's model is based on unpaid moderators managing most of the site. There's already controversy around a few moderators controlling all the large communities, karma farming and behind the scenes deals. Introducing money into the mix will just result in even more abuse as moderators try to take their own cut. It's a very messy eco-system that money will just make even messier.
If you think moderators won't take advantage of their position to get a cut of that money then you're living in fantasy land. Or just sell their accounts to others who will do that.
> Reddit has 10x the traffic because it's free.
Reddit acquired more traffic because it's free, true. But now, they aren't looking to acquire more traffic. They're looking for more revenue.
One way to get that revenue is to allow already existing content creators to charge for a part of the content.
I think that would not only encourage better content but would bring in other users and generate good revenue.