I’m just curious as to how you think these are insurmountable problems while every instance in existence today is already managing to navigate these issues.

The only thing the author is suggesting is to pool the resources that are going to waste copying media posts around the fediverse into a new backend (that means it’s not directly user accessible and presumably subject to the same restrictions as posts right now) so that the cost of media hosting is more distributed between all the fediverse instances instead of having the big ones hogging all the bandwidth of the small ones with memes because some users decided to subscribe to a community on say Lemmy.world.