The classic example is email; Imagine if you could only email people on Outlook, from another Outlook account. It's intuitive how shitty that would be, but for some reason we give social media a free pass for doing exactly this.
The benefits are (analogously):
- if you notice Yahoo users send you a lot of spam, you just block all of Yahoo. Sure, you might miss something important, but that's their fault for using Yahoo.
- if some dickhead like The Zucc releases a new email service (Threads) then maybe your email service (instance) will do you a favor and block them (defederate).
- pedos and bigots look for instances which is known for hosting shady shit, effectively acting as a containment barrier (most instances defederate these by default). Would never see that happen on Twitter (thank you Elon! /s).
- if an instance crashes, that sucks. But there are many others hosting federated content, so Lemmy will never be 'down'.