In theory shouldn't there be able to be both? Some apps should be able to optimize for large-scale usage while others optimize for ease of installation and maintenance in your spare time, but all should theoretically (barring the inevitable drama) be able to federate with all the others.

I do wonder what the funding model is supposed to be for the large servers. Tiny servers can be funded out of pocket, but large platforms can't, and the resource requirements of fediverse apps seem to be much higher per-user than those of a centralized platform.

(I'm not sure if the resource requirements are inevitable or just a sign of an immature app.)