As long as instance owners can handle the traffic, yes.

eh, kinda? Decentralisation means one instance can learn from the failures of another, and there's bo one thing that can bring the entire Fediverse down. But that's a worst case scenario.

What I fear is this: A spike of interest in the fediverse leads to many instances being overwhelmed, and the general newbie experience quickly turns many people away, leading to lots of people leaving with a sour taste. In the meantime, instances successfully adapt and new ones spring up, but most users aren't coming back.

Imo that's a more realistic scenario than some grandiose failure, and you could say it's already happened several times.