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see a lot of discussion about adding more specific communities on this instance and I feel as if it will dilute the community too much.

I personally see Lemmy instances as somewhat similar to old forums, many of those did so well because the community came together under a shared experience.

Lemmy is decentralized after all and instances based around interests will get created and discussion will get focused on certain instances for certain topics. Those instances will be moderated by the people who have passion and understanding for those topics.

Of course the great thing about Lemmy is that we're (mostly) free to visit other instances and if there are redundant communities it is not difficult to participate in them.

I do think it's nice to have a place to call home, a "hive" if you will. Where users can discuss their shared experience on the fediverse.