Yes.
> You still pay someone else to run the server (or not, if you prefer), you can just choose who you pay, and which server. Sending toots does not require that you set up your own infra, re: the email example.
Right, you either pay with your time or your money, as opposed to FB for which you pay nothing at all. Specialization of labor reduces costs, federation increases them.
> This is commonly asserted, but I’ve never seen much evidence for it. Was a direct democracy given a good run in the US at some-point?
It's never been technically feasible, though the main issue has changed from scale to security.
> I agree with you that Mastodon is unlikely to ‘take-over’ Twitter or Facebook anytime soon. But that wouldn’t be my criteria for success.
I can understand why that wouldn't be your criteria for success, but it is mine.