The short version is that beehaw was struggling with the (currently) limited toolset available to moderate user content, and they saw a heap of users posting things they don’t allow on their instance were coming from the two other big instances, so it was more effective for them to defederate to try and stem the tide.
I imagine regeneration will occur in future when the lemmyverse stabilises a little, and when better mod tools are available
I think the devs openly stated they aren’t backend bods and asked for help optimising the database as a priority. There’s a bit of work going on on github to sort that out I think. Anyone reading this who can optimise postgresql or contribute to a database agnostic retool should probably speak to the devs as I imagine you’d be welcome.
I wish I could help so much but I doubt they’re going to retool into .net haha.