People might want to avoid having the same thing happen with a reddit clone 10-20 years in the future. Federation allows communities to decide their own fate instead of having decisions handed out from on high
Sure, but only nerds will use them (not necessarily a bad thing) and will never go mainstream because of the difficulty to set up and search. Monolithic site like Reddit don't have that issue at all, you log in and away you go. Until someone makes federation that easy, I only see a Reddit replacement being of similar design and composition to Reddit.
Email is federated and everyone manages to use it just fine. It's possible the UX can be improved, in which case I'd invite you to contribute.