Dumb. Federation is how we escape from every cloud-based service being a dictatorship of the person who owns the platform. That includes federating with privately own orgs to provide them an exit.

By all means make good tools to allow individual users to block Threads (or other private instances ruled by amoral coporations), but doing it at instance level is just dumb.

edit: also, number of instances doesn't matter. Number of daily active users matters. Most users are on mastodon.social, mastodon.cloud, lemmy.world, hachyderm.io, lemmy.world, etc. And all of those are federating. The only large instance that is not federating with threads is mas.to