It's not about corporate instances. It's the bots and fake accounts/posts/comments. That's one of the issues with Reddit. There are little authentic posts. Most of them are advertisements it just reposts to farm karma to avoid detection. It's ridiculous.
I think this is the biggest reason. A huge amount of content on reddit is astroturfing / brand manipulation; both in posts and in the comments. And in addition to that, a there's a huge amount of 'karma farming', where heaps of popular but low-effort content is recycled over and over again to gain points and create a sense of credibility for accounts that will later be used for marketing / manipulation.
I don't understand the "it's complicated" thing. Figuring out which instance to use was slightly confusing (I went with lemmy.world because it seemed to be the most popular at the time), but after that, it's no more complicated than Reddit or any other social media site. Am I missing anything?
Yep. Presenting the user with a choice that they don't fully understand (which instance should I choose? What even is an instance?) is a very big deterrent.
Well, dummies is too strong a word tbh. its the people who didn't take the 30 seconds to understand how they have been using e-mail, a federated service, their entire fucking lives and things worked well.