>Reddit has a natural administrative/scalability partition boundary though, which makes federation much easier. I think a federated reddit would work better than Mastodon has.

To the point that quite a number of subreddits that have been banned, or that have been voluntarily shut down, have already set up their own clones on their own domains. t_d, drama, and fds are three notable examples that I can think of off the top of my heads.