For potentially large communities or a large enough group of related small communities, it can be. A core of people could spin up their own server off their own back and/or through donations. Communities exist this way outside of reddit already, this would just be a way to tap into a common interface and interoperability that federation provides. Or is there some centralised thing that means that no matter what someone might impose restrictions?

But not video and maybe limited images to keep costs in check. Maybe video hosting through unlisted youtube videos if that doesn't get curbed.