Isnt the problem mostly that most people dont spread out to other instances, and thats why you dont get the benefit from being distributed?

I mean, right now its a bit silly seeing people sign up for the most overloaded instances and ignore the ones with low amount of users. It should be exactly the other way around to maximize the value to the community.

In fact, to really benefit growth of the entire network, popular instances should stop accepting new users so they spread out on other instances by default.

There are literally only pluses being on a small instance: much better performance, no latency, no timeouts... and still you can subscribe to anything. What are the advantages of having an account on a big overloaded instance? I cant see any advantage personally. In fact, it will give new users a bad first experience.