Webfinger is entirely separate from ActivityPub, and is already used by other things like e.g. RemoteStorage.

Even if we postulate that what you say is true (I don't agree it doesn't scale, and there are increasingly commercial offerings if you don't want to run your own and there will be more, but let's put that aside), none of that stops people from using webfinger. If you want more than one user one the domain, it requires the ability to dynamically rewrite a URL to redirect to a static URL, otherwise it just requires the ability to serve up a single static file.

While I kind of like using DNS myself, and might have gone that way if starting from scratch without an alternative existing, the existence of webfinger and the fact it is in use for multiple things would have made me stop and think twice and just use webfinger.

To late to edit here, but an additional thought: If Bluesky starts getting traction, a move to undercut it from Fediverse proponents would be embrace and extend: Augment clients with webfinger, provide bridging to the Fediverse, and generally aim to make Bluesky users expect to be a part of the wider Fediverse. Only if Bluesky very rapidly overtakes Mastodon to the point of dwarfing it or remain an irrlevance, will it have a realistic prospect of remaining what they want it to be rather than turn into some hybrid that runs away from them.

Webfinger needs to be updated or replaced anyhow - it wasn’t specified in a static file hosting compatible way and expects a dynamic response or custom server rules. Not that bluesky helps here either.

It's easy to do. Here are some examples: https://www.packetizer.com/ws/webfinger/server.html

I actually serve up content using both static files and via dynamically generated content, depending on the domain and needs.

Those are steps for running a server with rules engine. I don’t want a server, I want users to be able to access a CDN directly which may not have such flexible rewrite rules. I’m building a kind of bluesky alt that works entirely statically