Honestly, I think this is somewhat of a misnomer. You're correct that you can decide to host your own Mastodon instance if you like. But on what?
If the open web really depends on general purpose computers, then it's somewhat disingenuous to suggest that people should just spin up instances on some cloud provider, because that locks people into that cloud provider. The old web didn't have that property - if you used a colocation provider and wanted to switch, you drove down, picked up your hard drives, and left.
The real reason why the internet centralized was because decentralization was never truly feasible. ISPs almost never granted static IP addresses to residential customers. Today, even residential fiber connections often don't offer symmetrical speeds. And why not? Because regulators never required it of residential ISPs. You can't sell a networked appliance that preserves user ownership and control on a remote-access featureset if your market doesn't have access to ISPs that will permit that! Is it any wonder that most "smart home" appliances and gadgets connect out to a central remote service to offer access outside the home?
The old web may have seemed decentralized, but it was never democratic. It had many "centers" that were non-corporate (and so, never aspired to reach the size of Facebook etc.), and with a strong selection bias for people willing to deal with colo-providers and shared hosting. Forget the decentralized web - we will never have a democratic web until people have been empowered to treat service hosting the way we think about our other rights secured under the Fourth Amendment - our persons (i.e. biohacking), houses (i.e. home appliances), papers (i.e. our personal data), and effects (i.e. wearables, automobiles).