Federation has its downsides though, there's less cohesion across the board. A lemmy/kbin platform may have 20,000 users (an example) but most of them might end up with interacting on instances outside of the one they signed up on. Whereas everyone on Discuit, for instance, will be only interacting on Discuit. There's something to be said for how a userbase is spread, not just the amount of users. If Kbin wasn't federated and its own thing, its user trajectory and interaction could've been different - although having only recently arrived, I understand that features had stalled for a long time.

I think the long-term trend of federation is smaller instances simply shutting down due to lack of interest/money in maintaining it without any noticeable growth and a small bloc of highly used instances dominating, one main one, and probably some politically charged ones orbiting it. Yes, anyone if they're annoyed with a particular instance can just down their tools and migrate to another instance - but if you've got or run communities on that instance, it is a downside.

Although in Discuits case, yes, it is really, really basic - and that more than anything likely stopped it growing before anything else. There was also administrative problems and other issues that drained users. It hypothetically federating wouldn't help it at all. Their users would just stop using Discuit and use the larger communities all across Lemmy.