The most valid argument for "keep everything the way it is and defed all the loosely moderated instances" is that the fediverse is best when it's lots of small servers, so everyone can choose their own adventure.
But, the argument that trumps that is that it is gatekeeping bullshit. It's saying the fediverse should _only_ be for nerds and should remain small. My friends on Threads don't grok instances and federation. They'll never be "here" if here is only many small focused instances.