You're assuming that people on r/wallstreetbets are exactly the same as people on wall street who literally only care about money. The redditors buying don't want to make money, they just want to kill the hedge fund. By wasting a few hundred dollars they are making a larger dent in wall street than congress has made for the last few decades.
That's the future defense against this kind of short squeeze. Funds will engage these subs (or hire people) and deflect interest from the stocks they're shorting and maybe steer it towards competitor's.
