I feel like we are talking about different things. You seem to be more focused on Reddit vs Lemmy, and I am talking about the "Closed" social networks vs the wider Fediverse.

People don’t really respond well to advertisements and influencers on Reddit either, for context.

The comparison is not to Reddit. It's Instagram/TikTok/YouTube. Maybe you heard of those: it's a place where WNBA players making $100k/year by playing can make $20k per Instagram sponsored post.

people tend to be democratic socialists/communists/anarchists”?

First, lumping together all these three ideologies as one single block is a bit handwavy. Second, I am not talking about "anti-corporate". I'm talking about anti-business. If you think that the majority of people are that extreme in their political positions, I'd guess your worldview is quite skewed.

I simply don’t believe that a paywalled system as you imagine could ever even approach Reddits numbers, or even Blueskys.

This is a strawman: I'm saying "We should not have to rely on open registration instances and hope that the admins get enough funds to keep going", which is not the same as "all instances should be paywalled".

I think if we didn't have as many open instances, we'd end up with more people self-hosting and running a server for their own friends, or we would start hearing from students asking their universities to run a server for them, or we would get hyper-localized instances where some group would pool resources to run a service for themselves, etc.

are major reddit subreddits in many cases.

Again, it's not just about reddit. Also, it's about having places where politics are not such a proeminent part of the discussion. E.g, Threads got a lot of their initial momentum by avoiding politics and getting sports journalists to post about NBA and football.