the whole point of Mastodon is to be a federated social network where the first choice is to choose their instance
Yes, but only nerds care about federation. consumers just want a simple straightforward onboarding experience that makes it super-easy to find, follow, and chat with their friends. If you are an inexperienced consumer just looking for a nice social media experience, how are you supposed to know what instance to choose? In a few cases it might be very obvious, eg if you love sportsball then sportsball.social is probably for you and so on. But in many cases it's not obvious, and it's even less obvious how to figure out which instances federate with which other ones and what that means for your ability to link up with other people.
Nerds need to understand that 99.995% of people do not give a shit about protocols or architectures - they just want to know does it cost money, is there an app for their phone, is it easy to use. I have 30 years of experience with distributed online communities and even I don't give a shit about federation on an emotional level.
It's clever, it's a great idea, but emotionally I don't care, in much the same way that I don't care about the fact that HN runs on ARC and so on. Where and how people hang out socially is primarily an emotional decision, both online and off. Nobody is invested in the mechanics of the social media platform unless they harbor a desire to run their own instance, which most people don't. You don't pick a bar or social club because you like their business model, you pick it because you like the atmosphere and/or because your friends already hang out there.