many of us would like to simply have full federation and curate content ourselves, though it's understandable that moderation needs to happen in some cases.
Agreed. I think the emphasis needs to be on usage of NSFW tagging, and making sure users have the ability to block magazines that they think are borderline (or just bad at tagging their content) without having to click into that magazine.
That said, I would not be opposed to a middle ground where entire instances can be flagged as NSFW so that their content is automatically tagged. 1) Instances should be able to voluntarily tag themselves like this so that all posts originating from that instance are automatically tagged, and 2) admins of other instances should be given the option to flag other instances as NSFW to their local instance as an alternative to defederating. There is still some room for overreaction with #2, but it's still putting control in the hands of that instance's users whether they want to interact with that content or not.