I hope this also means there will be fewer Techcrunch submissions here.

Second that!

Reddit's "divide to conquer" strategy is already paying off. It is clear now that every news site with a small community will launch their own in-site Reddit. It is a good move.

But how does that benefit Reddit?

the "powered by reddit" will be everywhere

Reddit sells the software for money. The money is the benefit.

Where did you get this info? Are they selling the small pieces that aren't open source?