“If you’ve ever hosted a potluck and none of the guests were spouting antisemitic and/or authoritarian talking points, congratulations! You’ve achieved what some of the most valuable companies in the world claim is impossible.”
You make a fair point, but the difference here is that we can always just go to a new instance that is more desirable. Mods and admins can power trip, but only within their own domain.
And defederation is always an option
Most instances aren’t going to defederate from the vast majority of the userbase. The various “we aren’t even going to pretend she is a 9000 year old vampire” instances are easy to defederate from because its almost nobody. But if 80% of the userbase will be lost to get rid of all the dog whistling? I mean… look at twitter. People will spin their refusal to walk away as an act of defiance and heroism.
And you get that massive userbase by not being strict regarding hate and bigotry.