In many ways, Mastodon feels like rewinding the clock on social media back to the early days of Twitter and Facebook. On the consume side, that means that your home feed has no algorithm (this can be disorienting at first).
Practically, it means that you see only what you want to see and only see it linearly. You never wonder “why am I seeing this and how do I make it go away?”. Content can only enter your home feed via your followed tags or handles and the feed is linear like the early days of social media.
When’s the last time you developed and released a full fledged software project for free?
Lemmy has gotten quite a bit of money in grants. It’s safe to say that without the grants allowing the lemmy devs to work on it full time, it wouldn’t be as functional as it is now. Getting grants really isn’t easy and that shouldn’t be the barrier to whether or not you can be compensated for your work.
If you are suggesting ads are the only way to fund software then you are mistaken. For example you can sell it for money to consumers.
It still has ads. It can’t take the moral high ground of selling software if it also has a free with ads version to try and convince people to subscribe. Get rid of the ad version and only sell the software and then it will actually have some integrity.