One of the biggest issues for me personally is the split effort. There are >300 distributions actively maintained, 300 projects whose sole purpose it is to package the kernel and some userland-stuff to make a usable operating system and provide for update mechanisms. 300 projects who spend resources on creating documentation, websites, giving support to users, ...
And the simple truth is: It does not matter too much which distribution you use, far too much weight is put on that. How much of what you do is distribution-specific? The type of init-system (mostly not important for a Desktop), the update mechanism, packages available, available/supported Desktop Environments / Window Managers, anything I forgot?
Most of the time you are running a browser, editor, terminal, video player, torrent client, openssh, steam, are using some version of python, ruby, perl, php, ... it quite simply does not matter whether you do these things on Fedora, Ubuntu, openSUSE, ArchLinux, Gentoo or FreeBSD.
Linus Torvalds described it in a similar manner once (too lazy to look for the link, but basically something like "I don't care too much about what distribution I use, I mainly work on the kernel anyways")
We are users, as such we use an Operating System in order to use programs.
The fragmentation probably mostly is rooted in the fact that it is quite easy to create your own distribution, and that many out there are head-strong people who are not patient enough to work their way up a command chain (regarding distributions with a democratic structure) or to succumb to what one dictator is saying. And some projects are just boring to work on, for example GUI-stuff or the code-monster Xorg.
I would not want to bundle all 300 distributions into 1, but (and this of course boils down to my opinion) 20 or so would do. It is important to have alternatives, like non-systemd distributions, rolling releases, source-based distributions, et cetera, but 300...
And if the focus is less on having 300+ distributions and more on making 20 or so distributions great, quality would rise without a doubt, not only ease of use, but also support, documentation, et cetera.
btw: Visited this page from Firefox, was greeted by the following:
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