You had me right up until that last bit - As it is I'd argue there's too much centralization. For one thing, people underestimate the technical considerations of hosting a reddit sized social media service. Once you reach a certain point, just moving to a bigger server isn't sufficient. Also there's the money issue of a single instance hosting all of lemmy.

But even more so than all that, the decentralization is the whole point of the fediverse.if all of lemmy was on one instance, we'd pretty much just be right where we were with Reddit, at the mercy of whoever owns that instance. When things are properly decentralized, if an instance owner goes on a power trip, it's users can simply migrate away, and there would be plenty of other instances of equal size with lots of content. If one instance ate all the others, you'd have to rebuild from scratch if you moved