First, I've never heard of "small instances [being] subject to a ton of scrutiny [or being] blocked by some large instances by default", so I'm not sure where t

First, I've never heard of "small instances [being] subject to a ton of scrutiny [or being] blocked by some large instances by default", so I'm not sure where that's coming from. Regardless, which is better: A federation where, yeah, there might be a bit of drama over who blocks whom, but each instance can set its own policy? Or a single private entity controlling the entire platform? You cannot solve the problem you're highlighting with technology. What you're describing is the human consequences of people exercising their freedom of association. But what you can do is place that freedom in the hands of the community, and I struggle to see how that is anything but a definite improvement over the current status quo.