This also leads to some pretty insidious siloing since (at least with Mastadon) you can have instances block themselves off from other instances or instances at large, which seems pretty unhealthy.
Not to mention, people don't typically want to pay for these services, or pay to host them, they want to access them for free. On top of that, with something like Twitter, the desire is to be visible to all, rather than just a few. Most people use Twitter to interact with 'the world', not just a local part of it.