I mean, a user's identity is @username@domain, and I can follow local or remote users equally easy, and most of the time I don't even notice where they are posting from.
If that's my living room, it sure looks like a living room that's wide open and the size of the planet.
That said, the number of instances that engage in excessive blocking seems to be rather limited. I'm not sure it's such a large problem in practice.
If they aren't the same, that's a bug. The lesson of Facebook et al should be that aggregation and content should be in the same place. People use these sites after a long day of work and don't have the time or energy to plug in other fragmented software to make it work--even technical people. They just want to consume and share content. They would see this fragmented ecosystem vs. the shiny all-in-one network with social proof of all their friends and celebrities.
> But this temporary and specific to Mastodon
It's endemic to all of these alternative platforms because they select for (other than curious technophiles) people who were too extreme for the mainstream platform.
Here's how to solve it and to get what you actually want:
One decentralized global network with self-directed moderation (following/friends). The problem with Facebook et al is not the UX or the quality of implementation. It's that the protocol is owned by one corporation. Why can't you just clone Facebook in every single aspect except the computers it runs on (everyone's rather than Facebook's).
ActivityPub itself is not tied to Mastodon or any federated protocol, all it is concerned about is format of messages and some authentication mechanisms.
Have you really thought this through?
The early web might have been eclipsed by the big companies, but don't be fooled by availability bias. How much of the internet is powered by Wordpress.org? Quite a lot to be considered "dead".
How many people still use some kind of RSS Reader? Google killed its offering more for a lack of way to monetization than for a lack of users. (Also, I don't remember people saying "RSS is dead, there is no way to discover who to subscribe to.")
Look at messaging protocols, Matrix also is still small compared to WhatsApp/Messenger/iMessage/Slack/Discord/whatever but their are numbers are growing. Far from dead.
Mastodon is people's living rooms only because the current users are mostly refugees from the centralized platforms, and yes, they are making this mistake of conflating instances with tribes. But this temporary and specific to Mastodon. As more systems start adopting ActivityPub and the more pulverized the user's become, the less this will be an issue.