I think you might be missing that federated systems are not supposed to be fully decentralized. Federated is a pit stop along the spectrum between centralized and fully decentralized that makes trade-offs in order to reap some benefit of decentralization (no single owner of the entire network, allows some measure of user choice), while not having to deal with the problems of a fully decentralized model (no central authority brings moderation challenges, how to handle spam when each account is fully independent and not tied to a blockable instance that likely has no account verification enabled, there's nobody to appeal to if you lost account access / password reset challenges, among other things)

Being federated doesn't solve the problem of decentralization because it's specifically a middle-ground. It's supposed to be a compromise with some benefits of both centralization and decentralization - and I think a lot of people are happy with that compromise.