If the fediverse succeeds, then its users will be fractured across many smaller servers instead of clustered in 1 large server. This makes security much harder.

A large server (like Twitter!) can be defended by large security teams, perform internal audits, and be held accountable by regulatory bodies. Their executives can be hauled before Congress or thrown in jail for failing to report a breach.

Small servers will mostly lack the resources to fund a security person, let alone a security team. They may not even have access logs. And small server admins are unlikely to face the same level of scrutiny from regulators. This makes cryptographic assurances like E2E encryption that much more important for federated platforms like Mastodon.