That's part of what made reddit interesting tho. Having these niche subs that still had a reasonable amount of activity. If they loose that this is the one thing they had over lemmy for me personally. I've never been particularly attached to say r/pics but r/aspiememes was the bees knees. They are coming to lemmy by now.
If Reddit think small.communities are worthless then they really dont understand social media. Lots of users belong to big and small communities. I left Reddit because the small communities I engaged with are gone.
I'm not drawn back by the big generic communities - they've lost me from both. Multiple that up everytime a small community has fallen apart with a proportion of its users are gone for good, and you have a real problem.
It's all part of the same enshittification. Reddit is dying through death by a thousand cuts.
They care about people seeing ads. And that's it. I agree with you that Reddit is dying (very slowly), but there are millions of dollars to be milked before the platform is fully dead. And for everyone like you and me, there are thousands who are there for the generic communities. Most people on Reddit don't post or comment, those don't strike me as someone who would enjoy being part of the niche communities.