I agree with you. Everything I’ve read makes the assumption that we can do nothing in the face of “embrace, extend, extinguish.” Anyone who has ever played a multiplayer game of any kind knows that a new strategy can be devastating, but only the first time.
But now we know about that strategy and it has an inherent weakness. “Extend” is only a problem if we as developers, admins, and users accept extensions uncritically. If “extend” is on the critical path to “extinguish,” then we can interrupt the process by not accepting or not becoming dependent on extensions that put the Fediverse at risk, no matter who proposes or implements them.
In my opinion, the worst that can happen is that we ultimately find it necessary to defederate from Meta. If that splits social graphs, well, for anyone currently using a Meta property, that is where we are now.
I think that “all” of anything is going to be a dumpster fire no matter what your standards are. Sturgeon said that 90% of everything is crud. What he didn’t say was that everyone has their own opinion on which 10% is worth anything.
Or you could put on your hip waders and follow Kipling into the waters looking for the 20% that makes it worthwhile to wade through the other 80%.
(More at https://en.m.wikipedia.org/wiki/Sturgeon's_law, including a link to the actual text of what Kipling said.)