Biggest issue is that a lot of features are missing, it desperately needs better moderation tools, and onboarding needs to be so easy that you’re technically challenged grandma can figure it out.
If it solves those, then I do think it’s possible. But if it actually did, companies would come in and try to become popular instances and probably try to cannibalize it.
It should be clear already that the majority do not care about morals, but just want entertaining content regardless of how badly they’re being treated. Even if fedi became dominate, it can be replaced by centralized media just as quickly since they can simply innovate much faster and with way more funding. Lemmy is like two guys doing it full time, so compare that to Reddit’s employment userbase when you compare quality.