If a social network, even a federated one, wants to gain traction, it needs to be a bit more open. Yeah, nazis are obnoxious assholes, but I'd rather have a network with them on it (and just ignore them) than have to constantly worry "am I saying the 'wrong thing'??" each time I post something.
I mean, the whole point of distribution seems to be that you can say what you want and it can't get shut down. Mastodon's ideals are at odds with its goals, IMO.