Advertising-based media gets funding and will work. Due to the nature of funding, any ad-based media will always be bigger and more mainstream. See Youtube, TikTok, Instagram. The content creators are now glorified advertisers who can hawk their attention-economies for money.
You can't beat money, not for mainstream. Those who work for money can make more money, and spend that money to make more money on top of that. That in of itself drives more content and eyeballs, and to some degree higher-quality (or at least, more attention-grabbing) media.
-----------------
That's not to say that Mastodon is going to fail. We nerds don't care much about attention and care more about having a discussion space to share ideas. Yes, there's a degree of attention-economy here as well (see any 1980s-era computer magazine: the advertisements for various computer parts are obvious). So there will be a tredmill towards advertising and attention media IMO, even on something like Mastodon. (Ex: Tumblr and Threads might be ActivityPub / Mastodon compatible, what then?).
Recognizing that we're a niche community who prefers to slink away from attention (and indeed: attention-grabbers disgust us rather than intrigues us), that's fine. We just need to build our own little corners of the internet that matches our discussion style and pace.
But don't fall into the trap of believing that Mastodon can displace Twitter (or whatever replaces Twitter in the long term, like Threads or Tumblr or whoever). Appreciate what Mastodon has built, but also recognize its a niche appeal.
------------
For the non-Mastodon aware, I think the best example of such a discussion site is https://mastodon.gamedev.place/explore, perhaps one of the better Mastodon instances for nerds that match Hacker News's stereotypes.
There's no chance that gamedev.place will ever become a mainstream instance. And that's fine and cool. Their focus on game development and programming issues makes them a pleasant community to interact with. That's the kind of community that only Mastodon can build, that will not work as well on Twitter.