ActivityPub isn’t a great protocol and ties your identity to your homeserver.
The tyranny of the installed base is real. What you choose to ship basically defines what everyone else can do with AP in practice.
I think it’s a shame that Mastodon got a million fuzzy blinky UI features before the (still missing) BYOdomain support, given that everyone in that space links permanent identity to user+domain.
I don’t see that changing. Do you? It seems everyone has settled on this, just like email, and that the solution is to just use a domain that you control for your identity (just like email).
If there are 50 million DAU on the fediverse, most users will not be on “small hobbyist servers”.
They also won’t be running a rails app.