A piracy focused instance that is hosted in a country with minimal to no piracy laws sounds like the way to go.
I don't get why all of the 12 year olds on here are bitching that the admins don't want to deal with potentially getting the instance shut down and/or jail time. People don't understand that the real world has consequences.
I think it has to do with these things: 1) lack of transparency about it (it just happened, no discussion) 2) the blocking happened just after a troll post about allowing communities about piracy 3) a lot of people that are into FOSS things are also into piracy and Lemmy is a FOSS thing. However, I totally agree with you. The people that make this place possible are doing it voluntarily and don't have the money to retain a legal team. They probably made the right decision. Corporations are very litigious and have more money. I just signed up for an account on the instance where the blocked communities are hosted. I'm actually glad I did. It's a cool instance with lots of interesting things to explore. They're into anarchy, which I think is fascinating. I'm a weirdo, though. I have accounts on lots of instances because I think it's fun to look at the fediverse from various points of view. I think most people want to just use one instance. Reddit nostalgia, perhaps?
If you have the means to do so, you should do it. I saw an instance today that is like that. It's called radiation.party, I think. I would do things this way if I could. I just don't have the equipment at home at the moment and my ISP won't allow me to have a static IP. All you need is a computer you don't need to use for other things plus a static IP.