The theory I've seen floating around reddit is that she's been brought in by investors to prepare reddit for acquisition, probably because investors have completely lost faith in the admins ability to monetise the site, now they're just trying to recoup what money they invested in reddit.

If that's true it would explain why Pao doesn't seem to care or even understand reddit, because she's not a long term appointment. She's just there to make reddit appealing to buyers.