My theory is that there is quite a few servers that are chosing to defederate. The number of total servers continues to drop according to fedidb.

Or admins are just finding it not worth bothering with administering their own server and turning them off.

I’m not seeing that trend. There are people who don’t want to federate. But they usually choose different software. Like Flarum or Discourse instead of Lemmy. And I think the statistics pages pull the user numbers directly from the instances(?) so a more defederated instance might show up in the statistics anyways.