I agree that a global hard-limit is problematic since every instance (admin) will want it to be how they see it, of course.
A per-instance limit was what I had in mind (not originally, this point has come up before because of the user I mentioned in my last paragraph and someone convinced me; There also already is an issue regarding that or something similar as far as I remember and I gave my opinion on it in a reply).
I think in that sense we both agree, it should be per-instance, and as you mentioned, the fediverse is all about decentralization, which is why I think something should be done about it.
And I think unless we have further methods to maintain decentralized moderation, this hardlimit (per-instance) is the first step, or at least a step, in the necessary direction.
Best case scenario, we'll get other methods of maintaining decentralized moderation and get rid of the softlimit (?) later down the line.
Of course democratic spins like subscribers voting mods every now and then would be an interesting solution (that opens up new problems, of course, but that comes with every solution).