Badly moderated subreddits get replaced all the time by better moderated ones. The system is inherently meritocratic: if you abuse your modding power then your community is going leave and go somewhere else.
If you're talking about the ginormous default subs, then yeah -- the landed gentry analogy is kind of apt. You can't just make your own alternative to r/pics or whatever and expect to gain traction without some unique angle and a lot of work.
(Although, again, this is how open source works as well. You can't just fork Debian or ffmpeg or Rails and expect a community on Day 1...)
If you're talking about the "long tail" of smaller subs, those get forked/replaced all of the time if there are mod issues or if somebody just has an idea to cover a specific topic from a different angle.
For an example, a lot of people didn't like the moderation tactics of r/audiophile, nor their refusal to look at affordable gear, so some of us made r/budgetaudiophile. We serve different parts of the audience and we cooperate with eachother. And both of us refer headphone-related questions to r/headphones. That is an example of things actually working Extremely Well.
Reddit is in an interesting position. I think its only real value is that long tail. That is where the actual valuable content+community is. The ginormous generalist subs get huge traffic but are utterly disposable - there's no real reason to get your memes or whatever from Reddit vs ICanHazCheezeburger vs random meme-based Facebook group etc etc etc etc etc.
Of course you can make an infinite amount of subs, but with 0 users they would be pointless.