@light I've heard of it but hadn't looked deeply into it before. Looks like it has potential---in fact, it might be possible to use a Nostr secp256k1 key as a did:key and share the same public key between the Nostr and AP versions of an account!
As for my Nostr idea, maybe this explanation is clearer:
Currently in Nostr, users are identified by pubkeys and optionally NIP-05 URLs, and they use relays to share events, and the users and relays have no relationship to each other.
What I'm envisioning is a part of the Nostr network (compatible with the rest of the network) where users belong to instances, like ActivityPub. Each instance has its own relay. All members of an instance have a NIP-05 URL on that instance and publish posts to that instance's relay.
The instances then federate with each other, following the same model as Mastodon: every time a user on an instance follows another user, the instance federates with the other user's instance (by connecting to its relay) and receives all of that user's posts.
If you read from an instance's relay, you get the same subset of the network that you would get on a Mastodon instance's federated feed: all users on that instance and everyone they follow or interact with.
But, since this is Nostr and everything is signed, it also provides censorship resistance and credible exit. If your instance goes down or bans you, you can not only move to another instance with the same pubkey, but also collect all of your signed posts from your followers' relays and reconstruct your entire account!
This also solves what I consider the biggest UX problem of Nostr: relays are even more opaque and confusing than instances, because they're not communities and it's not clear which ones you should join and why, how long they'll be around, etc.