It's good that this discussion keeps coming up; federated instances are not meant to get so large. Once communities become too large they lose cohesion and culture, invariably they eventually sacrifice users' well-being for practical purposes like funding, and at that point they become no better than the platforms they replaced. The cycle of exploitation continues.

There are communities online that have preserved their community culture and have not resorted to unethical practices to maintain themselves for more than 20 years, they are always smaller more intentional communities that value quality interactions over quantity of users. Given all the evidence showing how mentally and socially harmful large centralized platforms are - should we really aspire to recreate those unhealthy spaces in the fediverse?

The fediverse is an opportunity to take things a different direction, a direction in which smaller more cohesive communities share with each other without any one community dominating and suffocating the others. Federation is a fundamentally different model that challenges the centralizing paradigm "growth is good".