It's a viable approach. There's even a proof-of-concept UX for Lemmy/Fediverse that's indistinguishable from an old-school forum/bulletin board: https://github.com/LemmyNet/lemmyBB

Of course unlike an old-school forum, on Lemmy you can choose to federate with other instances that pick up your niche interest. But it need not be the default.

The crux of the problem right here. Modding is ultimately a power trip, and no mod wants to give up their power. A "head mod" of a popular subreddit wouldn't just join a random lemmy where they can't assert their power.

I’m a mod for a 1.5mill sub community and I’d gladly drop it! The only thing I care about is the community being able to move somewhere where we can continue to have interesting discussions about the thing our sub is dedicated to. I could not care less about continuing to be a mod. I only do it at this point because the community is awesome and I still learn a ton there.

Lemmy.ml wasn't accepting new users at the time. This server has 200GB of ram, plenty of space. I do also try to connect people to lemmy in general but it's challenging when the "main instance" isn't accepting new users.