Privacy

Honestly, I look at this and I see a future where everyone runs their own Federated services

I very much doubt it. People in general just don't care, or even worse. They think that it is a good thing as it keeps baddies out (it won't) and it will protect them (it won't).

It seems line very dark times are ahead. Self hosting is good, but it also gives the other side a bright shining beacon to go after. If they know everything about 99% of the population already, they can spend a lot more resources to really get to know the last percent that actively tries to avoid it.