Think about it; instead of those in charge or the instances deciding who they don’t want to be federated with and thus restricting content for the users, it would be better if users were able to block entire instances instead.
We’d be able to curate our own browsing experience so much better without admin/mod drama influencing the rest of us.
Edit: Alright so maybe not exactly replace defederation, but it should still be an option available to us, and in general should become the default action before defederation IMHO.
I chose my instance partly because of their anti-spam and defederation policy, so I don’t have to do it myself. Imo instance blocking would be a nice feature on top, but not as a replacement. You can always switch instances or create your own if you don’t like what your current instance is doing. I think we should rather improve that part of the system, so being able to easily move accounts and communities between instances.
Also, your instance hosts the content of federated instances for you (excl. images), and there is some stuff they just can’t or don’t want to have on their servers. That’s just something you have to respect when using a service they provide to you imo.