I believe decentralization is a cool concept from an engineering perspective, but it creates more problems than it solves. The current model of big, centralized services is kinda like democracy. Bad in a lot of ways, but everything else has even bigger problems, so that's what we're stuck with.

First, it's very hard for end users to actually connect and discover eachother. NATs are everywhere, so direct connections are often not possible, and introducing a central server defeats the point. Most non-techies spend a majority of their time on mobile, so having connections in the background is also not an option. Everyone having their own servers is not realistic either. It has been proven time and time again that, if people can choose between paying or getting something for free, they will choose the latter. Whether the ads are personalized or not (what some people call tracking) doesn't matter that much.

Monetization is hard with decentralized services, and money
is very often required to make something with good enough UX for most people. If you don't collect a lot of data, you make ad fraud easier, so ads are not an option. People don't like to pay (see above) and payments are hard to enforce if you're not managing the service, so charging is not an option either.

Making decentralized services is much harder than making centralized ones. It's easier to pretend everything in the world happens in order and accept events one by one, than to deal with the messy reality of thousands of devices doing thousands of things at once, without a coordinating entity. Imagine if one user kicks everyone out from a group, while getting kicked out himself in the meantime in other parts of the network. What to do when he goes back? Who should decide? Timestamps can't be trusted either, as they can be faked. Now you're having consensus problems, dealing with byzantine fault tolerance and inventing a blockchain. A central, trusted server is easier to write and less prone to security exploits.

Storing everything on your own device isn't great either. If you have 100 friends on Facebook, and each of them has 1000 photos, you don't have enough space to store them all. Not storing them isn't an option either, as you might actually want some of them at some point. Asking the original poster doesn't work, as he might not currently be in the app, so disconnected from the network. With something like a decentralized Amazon, you need search, and good, privacy-friendly, decentralized search is somewhere between hard and impossible.

If you can't have captchas, rate limits and a lot of data about your users, it's hard to prevent spam, spreading fake news, attacks, catfishing and similar behavior. Restricting your network to friends works, as long as you accept the fact that no stranger (i.e. at your new place of work) can ever find or contact you.

Even if you manage to overcome all those problems, there's still a pretty high risk that someone might do an embrace, extend, extinguish on your network with their proprietary app, kind of like Gmail is doing with email.

I want decentralization to work and Facebook to be gone just like everyone else, but, as sad as that is, it never will.