the issue put bluntly, is that in federation, your data cannot be 100% safe. even if this instance is secure and perfectly private, if this instance is then federated, that federated data can then be copied and have anything done with it, or to it.
or, to phrase it in a way that opened my eyes to this, quoting from someone else a month ago, "what makes you think you're in control of your data on any instance?"