Local namespaces are fine, even desirable since very few names are globally unique.

The problem with ENS is that it apes the federated DNS design without the oversight mechanisms. In the example you gave, an impersonator is subject to the rules of their Mastodon instance and the operators can handle things like lost credentials or an account compromise, and if a particular host is not a good custodian many people will block the entirely. ENS has none of those corrective mechanisms and I suspect that they’ll slowly be added over time to get usage.