I agree. There is a ton of functionality and UX that can’t be addressed on the backend because of the limitations of the architecture. Those limitations come with some very positive tradeoffs, but the hit to the users could be hidden behind client-based functionality.
Just as an example, it’s okay and part of the design that the same article could be posted to seven different instances. However, we then end up with users seeing the same article seven times, some of which will be having discussions and others which are completely ignored. A client could allow a user to decide to consolidate them all into a single post and read cross-instance integrated discussions. For posts from non-federated instances (for the primary instance for the client), they could mark them the same way they do deleted or removed tags now. You could even communicate to the user that the post came from a non-federated instance and give them the chance to retrieve it.
Basically, users should be allowed to create a news community that consolidates news.whatevers and merges duplicate posts.