In addition to the other replies: one big draw of specific servers/instances is the local timeline, a feed of every post on a server. While you can connect to anyone, discovering new people is much easier on the same instance. For this reason people prefer small, specific instances.

The Mastodon culture is also fairly opposed to large instances. Mastodon.social (the "flagship") is widely criticised for allowing itself to grow much larger than other instances. The community prefers small, homely intantances, median size is probably about 500 users, like this one. This may seem weird to outsiders, but instances like this one are one of the main draws of Mastodon.