Ya, It's my understanding that a lot of subs are going private to protest the fact that Reddit is killing 3rd party API app access. I assume it has to do with advertising pay or mod power.
Nope.
Some applications were developed to provide an alternative access to Reddit feeds. A lot of Mods use them because they automate processes to filter out spam or bad language (where appropriate), etc. A lot of Reddit Mods rely on them and have for years. Many don't know any other way to do their unpaid, volunteer jobs other than through the apps.
As others pointed out, Reddit absolutely JACKED the fee they charge for API access. Access to the API is required for 3rd party apps to work. One app (which is mostly free) was quoted a fee of $20 million USD per year for access. The CEO of Reddit made up some stuff about the developer behind that app which turned out not to be true. The CEO also said that the rates weren't going to chage; it's the new normal and Reddit is hell-bent on turning a profit (probably for a future IPO).
It's going to be like Twitter; they try to monetize the hell out of it and as a result a lot of people are going to abandon it. Reddit can't run without the volunteer mods and this move risks alienating most of them. I'm not sure it can survive if enough mods leave and shut down subreddits.