I think those are all fair points. Reddit did duplicate communities too, sometimes because some communities wanted to focus on specific elements of the topic they were covering, sometimes because of splits and disagreements, and sometimes just because it happened over time. People tend to find their niche, as do communities, but there will usually be a main one with the most members and activity.

Regarding individual instances, the way Mastodon has tried to manage that is by asking the people running instances to commit to a set of rules, one of which is giving appropriate notice should they wish to shut it down. This has been adhered to for the most part, and instances that don't voluntarily subscribe to those rules can get degenerated, or more likely just not promoted through the various explorer tools. So long as there's notice, there's opportunity to migrate to another instance and copy over data. It would be good to see something similar on Lemmy, if it's not already there (this is my first day!).