I disagree. I think that you can have both.
I think big tech has proven that it cannot be trusted. Their priorities are simply not in alignment with our own. Legislation seems to be the only lever that can hope to rein them in (market forces are no longer strong enough).
At the same time, smaller networks do not have the resources to comply with government regulations to a T, and so they should be given a longer leash. Governments also do not have the resources to chase down every Tom, Dick, and Harry running a Lemmy server (well, they do, but they shouldn't.)
Whether reality will play out this way is uncertain.