I disagree with many of the premises laid out here.

> Federation results in the data of users being subject to the whims of the owner of the federated instance

In the largely unfederated world we have right now, that boils down to one single owner per platform. The promise of a federated system is that you can always set up shop on another system of the same platform, without losing access to your relationships. And that other system could in theory even be run by yourself.

> Administrators can see correspondence and derive social graphs trivially. They are also in a position to selectively censor inter-instance communication.

Again, right now we're putting that trust into a single entity for the whole network instead. An entity whose interests we know for sure are not aligned with their users, but with their customers. Giving participants in a network the choice which administrator they want to work with is not strictly worse than that.

> All the privacy issues, none of the scale advantages.

Social networks are not a place for privacy. Not in a federated world, and certainly not in the unfederated model we have right now. Once more the case can be made that the current system is worse, because not only is your communication and metadata not private, but the unfederated systems we have often demand, or at least can correlate from context, your real-world identity. A federated system can at least do away with that issue to some degree.

If you require privacy, and there should absolutely be a place for that in a civilized society, you need to use an end-to-end encryption scheme for point-to-point data exchange. There are fundamentally opposed design goals that apply for such systems.

> Considering that one of the main goals of decentralized systems is privacy preservation, and thus, control distribution, we must develop better models than “the most popular federated instances gain full control over the users interactions”.

Control distribution is absolutely achievable within a federated context, while privacy preservation will always depend on (in this case: unwarranted) trust. Just because you can't reasonably achieve one, it doesn't follow that the other is a fool's errant. I would also argue that the quoted sentence at the end here is a bit of a straw man, because taking away that power from the individual instance is - or at least should be - the actual design goal of a federated system.

Don't get me wrong, a network design should do what it reasonably can to prevent and mitigate abuse, but I believe advertising inflated privacy expectations to end users is fundamentally dishonest. What they get is not privacy. What they get is some degree of control and independence. Which incidentally is one of the reasons why no federated system has really taken off yet in the mainstream: those are not big enough selling points on their own, and they're certainly not enough to motivate people into taking the huge social hit from moving onto an empty new platform. So far, only fringe groups have taken up these decentralized offers - groups who frankly almost nobody wants to have associations with.

> Reliability & Discoverability being the main two.

I agree very much with the problem being discoverability. None of the open networks really tackle that aspect, but it's not a problem coming from the fact that these are federated.