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A reminder in the age of the Fediverse: if you're not the customer, you're still the product.
(slrpnk.net)
OP was taking about Tumblr, but I think it applies even more to the Fediverse: users need to develop an ethos of paying to support the sites they use. Otherwise advertisers pay the bills and call the shots.
blahaj.zone provided an example of this recently. They reported that their finances are no longer sustainable but reassured their users that things will be fine because the fix was straightforward ... move everything off of AWS to a cheaper hosting provider.
Adding to the problem is ISPs.
I personally was part of putting fiber in the ground in my country from 2007-2011, there has been fiber in the ground up to peoples doorsteps and fiber connections between all street level hubs, since then.
It's only now, since 2022, that for an obscene premium compared to cable and copper, you can get fiber as a domestic subscriber, STILL limited to 1/1G and with fair use limits (going over 100GB in a day gets you throttled to a snails pace).
And even though the technology is present and available to go well beyond 1/1G, no ISP will provide.
There's plenty people with hardware at home capable of hosting substantial sized instances for federated systems. They just can't get the bandwidth to do so.
And with can't, make sure to understand this is in no way a technical limitation.
It's 100% down on restrictions by ISPs and "the industry", they don't want people to have that capability to host content themselves.