I think you've hit the nail on the head. The two biggest issues with Lemmy and the fediverse are:

1. Way too confusing for non tech savvy people. I get that all of the fediversians say "it's easy one you fiddle around with it". And sure, that may be the case, but the average user just isn't going to stick around and try to figure that out. It's not user friendly at all. Imo it's probably the biggest roadblock to widespread adoption.

2. Niche communities just don't exist in the fediverse. I hear many commenters here state how they enjoy the "small town feel", but imo that's the opposite of what Reddit is about. Reddit is all about the niche communities for whatever interest you may have. Want to see videos only of huskies screaming? Want to see pics of bread stapled to trees? Do you have mold growing on something in your house and want someone to identify it? Want to discuss your niche unpopular TV show that aired 20 years ago? There is even a niche sub for my specific profession when there are no forums dedicated to the topic. Reddit has you covered. Lemmy just isn't nearly big enough for that stuff yet and unfortunately I don't know that it will ever make it. Yeah, you can make your own communities, but that doesn't at all mean there will be users to sustain it.

Regardless, we're in for some interesting times and I'll definitely be playing around with Lemmy and kbin. Hope everyone is well.