If you were an effective altruist worried about adtech's pervasive influence on society and had unlimited funds, you could hardly do better than purchasing one of the few established, global social networks. Trim down its cost structure to the bare minimum, make the economics work without letting the global-reach advertisers dictate terms, preserve the network effects that comprise the real value of your media channel and then shape the discourse to serve whatever positive outcome the current system prevents. You'll have the only privately-owned, global-reach media channel in the whole world that's not fundamentally influenced by advertisers.
Of course, Elon Musk might not be an effective altruist and the billion-dollar interest payment is an impediment to the above plan, I'll grant you that. But hell, I wouldn't be surprised if the guy just ends up subsidising this thing from his other businesses if he can't make it run organically. That's what I would do. It'd be a uniquely independent and influential media channel.
I really don't see why this would make people quit Twitter en masse. The only people quitting Twitter are those who really hate Elon Musk, and there just aren't that many of them. The service works like before and it might well work better, allowing democratic discourse that is viable for a global audience nowhere else.
As I mentioned earlier, the conclusion boils down to whether you think Musk means well or not.
In practice, a site with user generated content from millions of users and a shoestring budget is an unmoderated, spam-laden shithole. Or, you can leave the moderation up to AI which permanently bans people for arbitrary and inscrutable reasons. Neither of these outcomes is appealing to the general public.
If you think advertisers are your biggest problem then I'll have to tell you about governments. Piss off the EU with privacy issues and you'll be fined. Piss off Russia/China you'll be banned. Don't keep some level of control over the violent threats US posters are making and you'll be civilly sued as an accessory.
And you're still going to spend a massive amount of time and effort banning crap if you want any of your user base to hang around, lest you just create the next 4chan (which even does a fair amount of their own banning).
In the sense we don't want to fund actual public places for discourse online and instead have pushed this off to private servers ran by private companies, yes. When a large portion of the voter base says "reduce taxes beyond all else" don't expect funding to show up for this. More so the advertising industries are also apt to fund political campaigns so it's unlikely most politicians are going to go out of the way to change status quo. And in that sense the average user is going to be aligned with providing most online interactions as 'somewhat' safe spaces until safety is not aligned with their political sensibilities.
I personally don't think that Elon is going to do much other than crash the value of Twitter and lose and epic amount of cash doing so. It's possible that the whole ordeal may push more people to federated social media, but it seems to unlikely to do so in numbers that matter.