Portable identity is useful only insomuch as single-stable-identity is useful.
Portable identity is useful only insomuch as single-stable-identity is useful. I don’t think either the federation model in general or GnuSocial specifically is ideal for supporting such a thing. That’s not necessarily a bad thing.
New instances are forming as affinity groups around specific shared interests. It makes sense to segregate one’s social networks around clusters of interests that have minimal overlap; one may maintain six or seven different accounts on different instances, and not bother to (or even avoid) linking them.
Having a single identity connected to all your various social groups isn’t in line with natural human behavior — we are a different person with our friends than with our coworkers, neighbours, or parents — and the idea that connecting these separate identities is valuable is mostly an artifact of data mining; the trend (only about a decade old now) toward single universal identities on social media as the default is not only unnecessary but sometimes actually damaging (for instance, someone who is gay, or into kink, or even who has non-sexually-charged yet culturally maligned interests, might not want their activity in those communities connected publicly to their work life or associations with other community).
Your cost estimations are based on a more centralized model than is really reasonable: mastodon.social is an anomaly, but ideally mastodon instances will be small. A more efficient implementation (even if it doesn’t scale) could bring us closer to a 1:1 user-to-instance ratio, which is the direction I’d like to go: when every end user is an instance admin, problems related to admin / user friction over terms of service disappear, and there’s no fundamental reason why you couldn’t run a single-user OpenSocial node off a phone or as a browser extension. (Changes to caching and routing might even make extended downtime from single-user nodes a non-issue: think DHT or Cord.) Even if we don’t expect nodes on phones, we shouldn’t expect expensive third party hosting to remain the norm: AWS & other cloud hosting services are an artifact of this weird return to hierarchy we’ve stumbled into, and if all nodes are effectively owned by three companies there’s very little benefit to decentralization; even most casual users have always-on internet, and therefore can run their own servers.