Why should they be blocked?
Suppose the network wants to be able to handle billions of users, but you want to keep each instance "small," i.e. thousands of users.
Then you'll have millions of instances.
Having each instance manually curate a list of others it federates with isn't going to work, but neither is instances not federating with the large majority of other instances.
You all need to figure out a way to get rid of this instance-level whitelisting or blacklisting, because that ends with either Meta or an intractable scalability problem.
Most people on Mastodon seem to be perfectly fine with living in a microcosm compared to Twitter.
Also moderation as the sibling comment mentioned.