I agree being able to filter/block everything from a domain on a per user basis would seem the reasonable middle ground.

Otherwise you’ll just end up with constant demands to defederate based on conflicting moral codes.

I don’t think growth should be the primary driver behind any instance, it should be about building and supporting the community on the instance.

Lastly I don’t think your argument is very persuasive, pick an idiology/group you feel are immoral (nazis, kkk, isis, etc…) and see if your own argument would convince you.