Its not to big to self host. It uses maybe a bit to much memory but anybody that has a real server (more then a Pi) can host it mostly fine. And many do.
Most federated system have one large server that has many users.
I hosted an ejabbard server on a 2014 smart phone for a while earlier this year. ejabbard & Prosody are reasonable to host using DDNS on a home network on just about any hardware which is much more accessible and decentralized than needing a “real server”.