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True, but back then you could add anyone as a mod, he didn't "moderate it" but was a "moderator on it".
A minor but key difference that means he just didn't care about perverts or that he was a leader of perverts.
He was free to take 2 seconds and remove himself from the list. He never did. It was always a "joke" on the site until it wasn't.
Why would he have a moral obligation to remove himself from the list or pay attention to what subs he was added as mod? I could see complaining that as CEO he didn't choose to ban the sub sooner, but moderator status seems kind of irrelevant here.
You gotta realize reddit was a lot smaller back then and the admins, including spez, were much more active and engaged on the site. He was very much in on the "joke"
It illustrates how comfortable he was with having a CSAM enthusiast subreddit on a site he owned.
Seems totally plausible and likely that he was added as moderator on a long list of subs and never perused or paid attention to that list, so how would it illustrate that? The infamy of that sub makes a lot more sense as evidence that he must have been aware of it, and that would be a legitimate basis for criticism. The moderator thing is just a memeable detail that is itself true but implies something that seems to be not true: that he had a direct role in operating the sub beyond running Reddit and allowing it to exist. I don't think there's a case for it having any significance beyond that false implication.
Copying my reply from a different subthread:
Like I said, that kind of argument would be better, it's not directly related to the moderator thing afaik