I don't think it's fair to compare large instances existing to fully centralized platforms. I think there is a place for both large and small servers, we need both.
I love the potential I see in the Fediverse and its underlying technology, but I feel like a lot of people here have a hard time accepting that this is genuinely pretty confusing to the average non-techie. Anything we can do to reduce friction and have a recommended entry point for the average casual Twitter/Reddit refugee is a good thing.
It's not like small instances are gonna go away for those that want them. The true beauty of the Fediverse is that we can please everyone.
Discord is very frustrating to me, especially the Linux client which has had countless bugs outstanding for years. But everyone I want to talk to is on Discord. Every game I play has its community on Discord. Every tournament I enter is organized through Discord. I don't see all of that packing up and moving to Matrix ever. I haven't even tried Matrix at all, because nothing I'd use it for is over there.