Federation is Just Bad Centralization
Decentralization was already realized in the 1990s
There's a blog by bloonface on the failures of Mastodon to retain users from the initial twitter-is-dying surge. As a platform (and it is one platform, as I will elaborate), the scene sucks-- this post isn't strictly about that.
I've heard claims that users don't care about decentralization, but I disagree. It's just that decentralization already existed long before its evangelists cared about its value, and the evangelists aren't doing anything useful with it.
Decentralization was already realized.
Until extremely recently, Twitter and Discord were interoperable as well as decentralized. You could embed content from Twitter into discord just fine, and links outward from Discord (as well as links from twitter into discord servers) worked swimmingly.
You could even spawn trifectas, with a link to discord containing a tweet that contained a youtube video. It just works, because the goal is to spread content, not to monopolize an individual user’s experience.
These decentralized websites were not, however, federated, and everyone understood this easily. It's not complicated to understand that if you wanted to see a discord channel, you needed a discord account with a link to the specific channel, and if you wanted to post to twitter, you needed a twitter account.
There was nothing complicated about this for users. Posting content from twitter into discord just worked, and it didn't take any sort of political arrangement between the two. On some level, this has always been the intended design of the internet, from the day someone typed "a href" into a text editor.
Federation Tends Toward Centralization
The fediverse is one shared platform. It's not decentralized. You're expected to use one entry point into the platform. A number of people equal to the federation members have control over that entry point's access to the entire platform.
Linguistically, I'm not sure how "federation" ever even became a synonym for "decentralization." I cannot think of another situation where federating something decentralizes it. It always involves, at a minimum, submission to a larger body's rules and norms. It certainly can involve a byzantine system of rules and norms created by autonomous-but-not-independent bodies in a complex series of pacts and treaties. We call this decentralization mostly because the human brain somehow mistakes scraps of control for independence.
Federation is not without its advantages, although I'm not aware of anything that positively leverages the major one-- the idea of multiple servers being able to host your content and share the burden of hosting. The closest thing I can think of is torrenting. In theory the fediverse should do that, but it doesn't-- because it isn't content centric. Lots of people can reply to a post, but they can't necessarily see each other's replies. They don't share hosting loads for a specific post, mostly out of a sense of paranoia.
What Should Meaningful Decentralization Look Like?
I don't think these are particularly hard decisions to make.
Portability of content. Embeds should just work. Advertisers mostly hate this for obvious reasons, but it is what it is.
Allowing traffic-to-source. You should always be able to get to the source of content.
Don't share accounts between apps and websites. The reasons to do this are minimal, except for control over users. Password managers are cool and good, actually.
Browsers should probably get better about how bookmarks work again. Remember rockmelt? I don't really but we can pretend they had some good ideas about how to manage that.
Embrace messaging platforms that are separate from content platforms.
The main hard things, I think, are figuring out anti-spam (which increasingly means anti AI) and verification of identity.