Their comments here (https://blog.redplanetlabs.com/2023/08/15/how-we-reduced-the-cost-of-building-twitter-at-twitter-scale-by-100x/#Our_Mastodon_instance) don't seem to me unreasonable.
They echo your point and respond that it's a community decision and shouldn't be a tech limitation (I agree, especially as they're gonna open it). Plus it mostly seems to demonstrate their Rama thing.
Dunno, bringing more tech to the ecosystem is probably a net good. Big and small places can both exist, and big ones, I'd wager, probably have value, so we should make them ourselves no?