"Theoretically, whether you were having X.com or Y.com aggregate data from PDSs, it'd still be the same PDSs so people from X.com could talk with Y.com - assuming no blocking/errors/funny-buisness was going on."

The point is that x.com and y.com have the power to block each other's accounts. So as I say, there's no point setting up y.com. It's much cheaper and easier to set up an AP server or Nostr relay instead. So unless something radically changes in the ID layer of ATProto, it will always be controlled by BlueSky, and it will always be as centralised as Xitter where it matters most.

> most people probably won't care or even prefer custodially held keys

This is like when apologists for Gmail say that most people don't care about runing their own email server. Or when apologists for proprietary software say that most people don't care about reading or modifying source code. Or when apologists for dictatorship say that most people don't care about reading laws or government reports.

It's probably true, but entirely beside the point. The fact that you *can* do it, if you want to, totally transforms the incentive structures.