This thread matches my experience with Mastodon and Diaspora*. It's fine if you are happy to live on individual instances and pretend that other instances do not exist, but they are not so great if you want a global audience. In this sense, they are more like the random disjoint online forums of the early 2000s, and not so much like the large monolithic social networks that people have come to expect.

If anything, their story is more likely than not showing that the centralization is not going to happen. If the users of the instances were the ones doing the segregation (due to some tribal/cultural divide), then you'd end up with a small number of highly polarized instances.

But if this is only a fight between admins, the intuition is that we would end up with the big instances constantly losing users to smaller ones (created by those breaking away from the bad admins) who would then federate among themselves.