I agree with your comments about the large subreddits, but I also agree with Mistletoe that even many niche subreddits (or at least "midsized" subreddits) suffer from the same moderation problem.
Namely, once a subreddit becomes popular or has basically "the default" subreddit name, it's extremely difficult to just start a new subreddit if you don't like the moderation on the old subreddit, because it's so hard to get people to know about or move to the new subreddit. There was some drama years ago where some r/lgbt mods went on a major power trip, which caused other folks to start the r/ainbow sub, but still most folks go to the lgbt reddit as it's what comes up first if you just search for "gay subreddit" or similar.
You say "because moderators are beholden to a smaller community", but that's the point - mods aren't really beholden to anyone at all, as it's not like electing mods is a democratic process. Note nor do I think it should be, as being a mod is a ton of grief and labor that people donate for free. But I do think Reddit could make it a lot easier and "fairer" if people wanted to "fork" a subreddit if people wanted to discuss the same topics with the same community, just with different moderation rules.