We should not be optimising Mastodon so it can handle more people per server. We should be optimising Mastodon so it incentivises more serves with fewer people.
(And if you take that line of thinking to its logical conclusion, you arrive at the idea behind the Small Web: https://ar.al/2020/08/07/what-is-the-small-web/)
@aral It doesn't necessarily have to be Mastodon though. One of requirements for big amount of small instances is the ability to scale down and ease of deployment - both of which aren't exactly Mastodon's strengths, and adapting it to that goal might be technically difficult without a full rewrite.
At the same time, healthy ecosystem should be diverse not only in servers, but also in implementations.
I had really great experience with deploying gotosocial for my private instance, for example :)
@aral @shine I kind of had this on my to-do list for years to make my own website which already has notes, photos, podcasts, events, likes, etc. ActivityPub aware like https://aaronparecki.com/ does which would bridge the IndieWeb with the Fediverse. Some day in the future perhaps.