Considering how hard it has been, and to some extent still is, to run your own Bluesky instance, the main problem is that it automatically becomes centralised in a way that no open protocol will solve.

If 97% of your users are on one instance it is not a distributed platform. Applying this to mastodon, I am pretty sure most people would consider it a problem if mastodon.social started getting more than 40% of active users (currently at about 15 iirc).