The way I think about it is that it allows for self-regulation the way it happens in real life too. In real life you can't go into someone's neighborhood meeting and harass people, you'd get kicked out and you wouldn't be welcome going forward. The same way servers can cut ties with other servers. Someone here explained it much better than me but the idea that everybody should have an opportunity to be heard by everyone just isn't realistic and isn't what we do in non-virtual communication. Federation allows to facilitate that.