Selfhosted
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The devs were saying that browse load was the major issue a few weeks ago, but more instances have been stood up since then and it does seem like replication is getting a bit creaky. I don't think replication load is flatlining the CPUs of big instances, but it does seem to be reaching some kind of scaling limit that is non-trivial to tune around.
The optimal is definitely the goldilocks zone of ~100 to ~1000 active users. Whether single-user instances are a net win or a net loss is still pretty unclear to me, and if they become a net-loss it will manifest as federation issues of the sort described here, but it's pretty hard to tell whether those issues are misconfigs on the tiny instances, misconfigs on certain big instances, temporary scaling issues that will be quickly fixed, or hard problems that will limit the size of the network for a while.