I agree with him that there is inevitably a strong tendency toward centralization, but I think a key feature to help with that would be the portability of one’s account to new instances. Even if the majority of users are in only a few instances, there is still a safeguard against one entity (I.e. corporation) directing the health of the whole system. If accounts were portable, when an instance went foul, people could move and the system as a whole would self-heal.
Nonetheless, it’s an interesting article. And the cost and challenges of running a web scale service are not conducive to small time players.