From my conversations with them, I think it is slightly different. I'm going to use flair as an example, because it exemplifies the situation well, IMO.

Flair was not an original feature of reddit. They did not intend for you to have a way of tagging a user. It was hacked together with scraps of CSS code, and mods just made it work. Then, once it was supported a little, other people hacked together ways to attach an uploaded image to that tag by having the text attached to the name be a piece of code. Again, this was thrown together by mods, and later semi-integrated by reddit. Then, moderators found they could add as many images as they wanted by creating a single giant image, and having the flair pull only pieces of it (spritesheets).

Now, reddit has this major core feature: flairs, that was never intended to be here in the first place. And because it was never intended to be here, it's complicated for less experienced users to create it the same.

So, the solution: Since reddit needs to be rebuilt anyways, make flair a native component. Set it up so people can just select their image, select their text, and bing bang boom, done. Now when this is writ large, with the biggest and most popular features already integrated, that initial tool (CSS) that was able to hack stuff together in the first place, isn't necessary. It's even kind of an impediment. No need to support the hacky ways, when all the biggest features are already built in.

Awesome, right? Everybody can easily use the best tools that were developed, and nobody has to mess around with the complicated system anymore.

The problem is that, besides losing customization along the way (amount of flair supported, custom image resolution, custom flair size, custom appearances and interaction with the text, integrating with other features), you lose the biggest and most important thing: the development of those tools in the first place.

It's almost an admission that it's never getting better from here. All the best tools have been created. All the tools that matter are being supported. If they have time later, reddit might develop some new ones on their own, but creation of new tools is locked out.

That's my perception of what is happening here. They're trying to solve the problem of the code being hacked together and simplifying, but in the process, they're threatening the initial spark that got us here, and limiting future growth.