Well, both of them are much more sensical at a glance than "subreddit." Subreddit only makes sense because of how long we've been using the term, if you came to it without prior knowledge it'd be hard to figure out the meaning.
I do agree that "magazine" is pretty terrible, though. There's no meaningful analogy between what we're doing here (threaded conversations on a particular topic) and what's in a magazine. "Community" isn't terrible, IMO, if it comes down to it I'd much prefer that one.