why does every instance need to host all content if i can just follow a community on a different instance for that sort of content?

I think this is for the most part true. The user should get to decide what to subscribe to and what to block. I think that having instances that are safe for work while others that will host everything else would be beneficial. It would almost be like having 2 accounts but not having to bother logging out and logging back in. That way if you are in a setting that let’s say porn popping up on your screen would be an issue then you just switch instances to the safe one.