Are we decentralized yet?

I thought Bluesky was federalized? How is it not?

It is, but most people use the central server

The federal part doesn't actually work in practice. It's just a marketing gimmick.

This is factually wrong, and disproven by the fact there are now fully independent federated instances such as BlackSky and soon to be NorthSky. Furthermore, they have independent codebases which are fully compatible. Compare to ActivityPub where most instances are just running Mastodon or some close fork or risk breaking compatibility. What's the point of federation if you are stuck with a monoculture of implementations?

The main BlueSky services are still by far the most popular, which is why we see centralization on the network.

Mastodon is definitely not the only fediverse setup that is popular, Misskey, Pleroma and forks of those integrate perfectly well. Given that the main Misskey instance is one of the largest fediverse instances (certainly by activity) it seems a bit unfair to criticize the fediverse on this. I mean, how many completely independent microblogging implementations does a network actually need? (Not even including things like Lemmy or Peertube which are also ActivityPub instances.)

On the other hand I really think you're underselling how much more popular Bluesky services are than any existing alternatives. I don't think we can actually see the distribution of network traffic, but I would be willing to bet decent money that the sum of all alternatives to the Bluesky AppView wouldn't even crack 0.01% the traffic of the main Bluesky AppView. And, honestly, I would probably bet even more money they'll never even come close to cracking 1% ever for the entire lifetime of the protocol, unless Bluesky Social PBC literally goes out of business.