@atomicpoet The biggest issue with federation is trust. Unless smaller instances market themselves as trustworthy, barely any new users will pick them. Many small instance admin teams are anonymous random people. This doesn't help. The biggest instances benefit from "everyone I know has picked them, so can't be bad" and "too big to fail". We as users have no real way to influence the masses and as bad as it makes me feel saying it, we need ... "influencers" for that.
@tobyx The way to fix this is to build a culture that values de-centralization. The notion of self-hosting and administrating your own instance should be normalized. We should embrace small.