Federation makes sense for a Twitter replacement. Not so much for a Reddit replacement. I get the feeling that we are at an end to the experiment. Eventually, people will realize that we cannot replace Reddit with a Fediverse based solution.
So many instances block Hexbear and others. We are well on the path of creating separated communities, just with the added headache of having to police federation. Not to mention the problem of power users and out-of-control mods, which federation makes worse rather than solving them.
Ultimately, I think a real Reddit replacement will have to think hard about fixing the fundamental problems of this form of social media, rather than attempting to use buzzwords or cool new ideas.
The main ones are that certain users or groups of users end up dominating each community, and that mods become abusive over time. Brigading and bigotry are big issues too. You also mentioned echo chambers, which I agree is another issue, although that is present in many social media platforms.
Unfortunately, federation doesn't solve these issues. At the very least, some kind of basic improvements are needed. Ideas like preventing large communities from dominating the front page, removing or limiting the effect of downvotes, or having more checks and balances for what mods can do, are necessary. But none of that happened. So this attempt at a Reddit clone is just ending up as a bad Reddit clone. Which is probably why Lemmy/Kbin/Mbin will slowly fade away, once people realize that it is just a Reddit clone.
This won't be the final attempt at creating a replacement for Reddit. Eventually, enshittification will destroy Reddit, and something else will replace it. But it probably won't be the Fediverse's attempt at it.
I think that power tripping is slightly prevented by having public modlogs. Doesn't completely prevent from happening, but at least people can call out on it.
For the echo chambers, an alternative to the down/up vote system would probably help, but that's not something I see happening in the near future. The upside is that we can still hope for it happen "one day" once the platforms (and including Piefed / Sublinks / Mbin) will be more mature