I think blocking entire instances is inevitable, but the choices various instance owners make in doing so will help shape where the chips fall in the long run in terms of where people end up settling in - someone with leftist tendencies won’t want to set up shop on an instance that defeds all the leftist instances, for example.
A lot of people call for outright defederation because they came from reddit so they want that more singular level of authority/moderation. Whereas (purely hypothetical, haven’t been on reddit in a long gkme) a pro Palestinian sub could be banned because reddit took a pro - Israel stance, on Lemmy if .world bans my community I can take it to Ml, and they HATE that.