This guy seems to be presenting himself as such a monumental prick that it feels like theatre. Has it been the plan all along that he becomes the scapegoat for this policy?

He steps back, another puppet takes his place. And puppet 2.0 appeases the community by making some gesture of good will.

Perhaps halving the proposed API costs. Or taking the sensible route and making third party access open for Premium subscribers?

But at the end of the day they still achieve what they want: demonstrating to investors they have control over their users and boosting their income.

Karma might work on a per instance basis, but if implemented on a federation wide scale you’d have to trust every instance. It would be far too easy to artificially increase your karma with your own rogue instance just by editing the database.