A lot of the conversation around tumblr's "financial defecit" has started falling into very binary camps of "if you like something. support it!" and "poor people need money more than tumblr", and I'd like to posit a secret third thing.
For starters, this old Dan Olson video is illustrative on the general pitfalls of interacting with platform owners as if you have shared interests:
I don't think enough people recognize that the interests of the Owners will always be at odds with the interests of the people who actually like using a blog website. It doesn't matter if the people who make tumblr have good intentions, or if they're "lifetime bloggers", etc. At the end of the day, their priorities will always be to find the most inexpensive path to growth.
In the present, the most inexpensive path to growth is the Content Trough. A tiktok/twitter "feed" of "content" that never ends and keeps you scrolling - seeing more ads - producing more data so that it can target the Content Trough more accurately. This is why tumblr wants to collapse reblogs, to lead people down algorithmic feeds. The current approach to Social Media Platforms is low-effort, quick reading media that people can generate a "hot take" on and move on.
It's approachable as a direction because users from other sites are already familiar, and higher-ups like it because it doesn't require any new ideas and comes with baked in statistics. Half of the reasons that tumblr is fun to use and good are also the reasons its unprofitable and outdated; and it'll always be more appealing to them to court new adopters than old bloggers.
Basically what I'm trying to say is that we can't make tumblr profitable and good. Obviously the site tanking means it'll go away as a living platform, but at the end of the day it could be better than the entire history of the site becoming illegible and inaccessible as the format completely eats itself whole trying to look like Twitter.
The 2020s have seen capitalism completely cannibalize the internet as it fails to produce the infinitely climbing line its so desperately seeks, and this is no exception. The well has dried up. If you're looking for someone to blame it's not other tumblr users, it's the structure that only allows social spaces to exist for the sake of profit.