It's not against the rules of reddit, and the allowed request rate is enough to grab everything even during busy periods.
You're right that it relies on a central service that's polling reddit. I've done all I can to make it as stable and scalable as possible. I've been running, monitoring and testing it for a week and it's been keeping up just fine.
Given that many people have bots doing the exact same thing, I don't think you'd have any trouble. Hell, total load on reddit would decrease because people would use your service. I don't know why reddit didn't implement something like this themselves.
Given the small amount of people that would use it (relative to the entire userbase), I don't think it would ever be on their roadmap. It would take many developer hours and constant maintenance, which wouldn't be worth it for them as a company. They have more important things to build and fix.
You're right that it relies on a central service that's polling reddit. I've done all I can to make it as stable and scalable as possible. I've been running, monitoring and testing it for a week and it's been keeping up just fine.