Probably a very polarizing question.
On the one hand, having most of the users and communities on LW causes technical issues (see this post), and also gives the LW staff too much power over Lemmy as a whole.
On the other hand, with 18k MAU on LW out of 47k (https://fedidb.org/software/lemmy/), every community listed there has a much higher chance of visibility compared to an alternative hosted on another instance
Definitely, but I guess the amount of sysadmins wanting to operate a lemmy instance is limited. Add to that the CSAM and other nasty stuff that happened at the beginning, and only a few people would be okay to manage their own instance.
Also, even a topic-focused instance would suffer from the lack of population. How many interesting topic can you find for a population of 50k? That can’t be too precise, because you are talking to a very small population. Well, I guess that’s why db0 and slrpnk are doing well, piracy and solarpunk are popular among Lemmy users (as well as whatever the political stance of lemmy.ml is)