There is another downside. The local and global feeds are potent discovery tools. But they only work if you group people with similar interests onto the same instance. Your proposal assumes a certain amount of homogeneity. If everyone is interested in the same content anyway then yes you can distribute it randomly. But all the people interested in Linux memes are already here. If we are to expand our reach we need to have instances catering to other interests.
And it also doesn’t work with international communities. German speakers for example go to feddit.org, precisely because that’s where German content is going to be amplified via the local feed and therefore easier to discover (for people an that particular instance)