So, if you have the technical skills and the willingness to host an ActivityPub-enabled instance, you can serve it for others who either don't have the skills or ability to manage it themselves. If you keep it limited just to the folks in your own communities - people you know, friends of friends, etc. - then you limit a lot of the issues that arise from running huge instances - moderation, privacy issues, etc.
We took something natively decentralized - TCP/IP internet - and handed it off to handful of companies to run, thus centralizing it. That was a mistake, especially as they use the power they acquired to push back against folks, for example, trying to build independent community ISPs.
We need to decentralize as much as feasible - it's not all self-hosting, but "just let the money perverts run things" has not worked out so well for us. The solution lay somewhere in the middle, where cooperative groups serve the needs of the communities that matter to them in exchange for fair compensation.