Federation sounds like decentralization to me. Decentralized is like a dirty word when you’re in the business of either selling SaaS or pushing private citizens to go all in on the GOOG/AAPL/MSFT ecosystems. And everyone with any influence over what gets adopted and used, is in those categories.

They are being used. Workload Identity Federation is often used to assign oidc identities to workloads and the Client ID Metadata Document (basically dynamic client registration) is used in protocols such as MCP and atproto