I would disagree. Bluesky has no algorithm and it's growing quite rapidly. And I think that a large part of that is just having the people there that one might want to follow, and fosters community and conversation. A place like Threads absolutely does not do that. Mastodon is just an impenetrable mess from a UX perspective. The average user doesn't care about federation and needs a solid and understandable entry point. Bluesky is federated but 90% of the people there have no idea what that means.

but trying to sidestep it completely like Mastodon is is just going to result in a network that never hits the critical mass necessary to start exponential growth

If keeping algo-gaming engagement bait off the platform is a price a platform has to pay, then I'm happily willing to accept that.