The balkanization of the internet isn't having more websites on the internet. It is the internet splitting into multiple seperate internets that don't interact. Stuff like the great firewall, the sites that block EU IPs due to GDPR, and what Russia is doing are all examples of the balkanization of the web into smaller, more compartamentalized networksk.

What you are referring to is centralizarton/decentralization where the number of different sites/hosts goes up or down.