I think that's more what the devs had in mind when they decided to make Lemmy federated. Each instance would be a little more distinct in the users it would attract (ideology, hobby, etc.), and federation would be more about exploring the local neighborhoods; maybe instances would even limit or ban user-created communities.
In reality, most instances seem to be attracting similar users and making mini-reddits that can talk to each other. It's ended up more about simple load balancing and having backup communities accessible should you get cut off from your preferred one. You can still get out and explore the nearby neighborhoods, but they have the same Starbucks and MicroCenter that yours does. This still is useful in its own way, but it comes with different set of challenges, particularly for the front-end UI's.