Nobody outside tech cares about decentralization or federation.
At some point, everything converges to centralization.
No amount of Mastodon servers or any fediverse self hosted instances spun up will change that.
There is a reason that mastodon.social is the biggest instance and that they couldn't close registrations to promote decentralization.
Hell, I would even say that threads is the biggest mastodon instance.
The chicken and egg problem is that users go where the content is, and content goes where users are.
In reality what this means is that the vast majority of both users and content tend towards a single solution, and that is where there is the least friction, aka the path of least reesistance.
Monetary incentives and various perks (features, first mover advantage, ...) can help but overall it seems to tend towards ease of use.
For users, TikTok is the king for a reason: EVERY SINGLE SWIPE (caps because I want to intentionally put a LOT of emphasis on this) is content that YOU, specifically YOU, are likely interested in. If not, the very next swipe is likely to be what your brain thinks is good, because the algorithm is so good it already knows what you want. Yeah, I know, that's because they spy on their users, whatever, sadly users do not care about that.
BlueSky? Even if you follow specific users, content discovery is so, so much harder. But the main problem is that the vast majority of users, especially new ones, will be subjected to subpar content compared to other platforms.
So why should a new user come back there instead of literally anywhere else? And if there are no users, why put the content there, and if there is no content, there are no users, and so on...
Notice how in all of this the underlying architecture has quite literally no relevance and is nothing but a technical detail.