Problem is that a) new users don’t know that they can join communities across servers, and b) it is intuitive use start with the servers that a lot of people like.
Instance browsing and onboarding is probably the biggest challenge to Lemmy’s growth. The current experience either scares new people away, or encourages them to congregate on a limited set of instances.
If the registration process just picked a random instance for you, maybe something nearby, and assured new users that they can visit communities and interact with users across instances, very few would pick the biggest instance.
That isn't guaranteed, though. The other day I wanted to create a new community and was browsing instances on join-lemmy.org/instances for an instance that was compatible rulewise. The one I picked evidently wasn't a good pick (burggit.moe). Trying to advertise my new community, I found out it was defederated from beehaw (and likely others) and got insulted as a pedophilia sympathizer ...
Randomly assigning new users to instances would make a substantial fraction of people very unhappy.
It's also that lemmy.ml is the instance I've seen posted everywhere when it's brought up, so naturally people would just sign up there instead of finding somewhere else.