It will end up like Reddit. But right now it isn't, and that's good enough to make a play for the users. Given a choice between that and choosing a server, signing up, finding its log-in unresponsive, looking for another server, signing up... (I haven't gotten further than this) who do you think wins?
By the way, we agree. I want a federated system to work. But simple sign-up fuck-ups, where even someone who's curious for curiosity's sake has to spend half an hour figuring out which servers even work at the moment,