I felt slightly frustrated when I tried some Lemmy apps and they only offer a few largest instances in the initial setup and leave people to discover/find smaller instances by themselves.
It is understandable that they don't want to present a thousand choices and confuse people, or get people to sign up for an instance that disappears a week later. Also, larger instances tend to get a snowball effect by receiving more donations / volunteers and scale better, other nodes are also more likely to help them if there are e.g. federation problems.
However this effectively promotes an centralized ecosystem that both depends on and burdens a small number of key instances.