I get the idea of instances, like you can make your own and this is good for privacy. But some lemmy instances are much more popular and this in fact makes it another Reddit. If there are separate instances for niche topics, why not make it another community inside a larger instance?
We need to see the whole context here. We are the ones who grew up watching how corporation’s advertisement-driven and centralized model of internet took over the wild west that was before the 2000s. Internet access wasn’t widespread before that and it consisted of many separate and independent websites, each ran by its owner, with a small but tight community of people, usually around their own forum.
It’s a “going back to the internet’s roots” kind of movement. Thus, self-hosting (as it used to be) and decentralization (while also introducing modern innovations such as ActivitiesPub) is romanticized. And because Lemmy has only recently started growing in popularity, we are at the stage where there is a plethora of selfhosted small instances in a chaotic way. It’s like watching solar system formation in an astronomical scale - first you have the matter spread out everywhere but most eventually concentrate around big spheres. I presume the same will happen here too, but the Federation model we’re adopting will also leave the door for small scale independent communities to thrive too.