In the older, better days of the internet assholes would be banned frequently. The problem is that in recent years instead of having a large number of relatively small forums we have a few massive social media sites that effectively control communication over the Internet, and being banned from one of those would be a very big deal.

With the Fediverse, we can go back to the way things were, where banning someone from a given instance isn't a huge deal since people can just make accounts on other instances, but it's still enough of an inconvenience to act as a deterrent. And if they keep being an asshole on their new instance then they'll get banned again until the only instances that'll take them are ones that cater exclusively to assholes, and those can be defederated.

No, assholes need to learn to behave within the context of the instance / community they are posting to or get downvoted / moderated. Ideally they go away to their own instance where they can be assholes to each other and be defederated.

What makes you think this platform has "free speech"? It has a bunch of tools for suppressing or excluding undesirable tools. Most obviously, moderation can be used to remove comments or users from an instance, and federation can be used to remove whole instances from the network.

I value free speech. But not every platform has to support it, and Lemmy explicitly doesn't - unless people just don't just those levers.

Isn't that what 4chan is for?

In the older, better days, we used kill files, and our choice of platform was eventually overrun by spam.