Okay and once those grow to the point where they need to monitize to stay afloat people will just switch to other instances

And once the devs can’t maintain server costs, they should shut down new registrations.

There’s no need to charge for servers

Why should there be larger instances?

Who says any instances need to grow?

Lemmy’s would benefit from scaling horizontally (more instances) instead of vertically (bigger instances)

This doesn’t make sense