I do think not allowing users to override blacklists is an issue personally. When the main point of federation is supposed to be about giving power back to users, and that you are supposed to be able to follow anyone on any server. Having blacklists as default is one thing, but not allowing your users to make their own decisions is just treating them as children.

And it's not just about "nazis" many instances do block instances that allow porn or simply opinions they don't like. For example the largest instance lists plenty of blocked instances just under "inappropriate content" (they list "hate speech" separately, which I assume nazis would fall under)

The only way to get access to the entire fediverse right now is to host your own instance, that doesn't seem desirable.