I think we are talking past each other. I understand that the current implementation of the federated social media lacks a lot of things, so I am not disagreeing that currently people would benefit from joining a bigger instance.

But my argument though is that we can have federated social media does not tend to overcentralization. If the Fediverse gets popular - really popular, tens of millions of active users popular - then there will be too many independent actors who will be participating and the whole system will lend itself to many different hosting schemes:

1. business running their own servers, to keep their control over their own social media identity.
2. companies who will give access to users contingent on another service (e.g, the NYT giving a free account to every subscriber of their newspaper, Vodafone setting up their own Mastodon service, free access for every mobile customer)
3. public institutions
4. self-hosters, community groups
5. companies who will offer the service for "free" and will try to monetize the service through some other means (e.g, Facebook/Threads)

IOW, if things grow and it becomes a viable alternative to the status quo, it will end up as a core infrastructure component, like email. And yes, Gmail is by far the largest provider and the hold a lot of power, but even they can't simply decree to flip the tables in their favor.

I disagree... as a user you want relative proximity, but not centralisation. Which is exactly what federation provides.

Think of it like stores:

The centralized social-media is a bit like those big-box stores that have a little of everything. Hard to navigate and find the stuff, usually they only offer the items with broader appeal, and the entire experience is just unpleasant.

The Fediverse is more like a mall with many smaller shops. Small niche shops can survive because the many other shops drive foot traffic and if you are not interested in tools for example, you can just not enter the hardware store.

Like I said above, specifically for the “I want to socialize” use case of social media sites, there’s no upside to federation.

The hell there is.

When "I want to socialize", I don't have to go march up at the UN headquarters, the Vatican or whoever "controls people" and ask for consideration. I can literally just walk out my door and walk to my local plaza. Or maybe the local grocery market. If I'm feeling lucky I can take the first googelbus and go to the nearest stadium, anime store or vintage disco bar. None of those needs to rely on the fact that other supermarkets or stadiums exist to provide socialization.