Edit: obligatory explanation (thanks mods for squaring me away)…
What you see via the UI isn’t “all that exists”. Unlike Reddit, where everything is a black box, there are a lot more eyeballs who can see “under the hood”. Any instance admin, proper or rogue, gets a ton of information that users won’t normally see. The attached example demonstrates that while users will only see upvote/downvote tallies, admins can see who actually performed those actions.
Edit: To clarify, not just YOUR instance admin gets this info. This is ANY instance admin across the Fediverse.
You log yourself into your instance using your password, using code that the instance sends you. Thus it is trivial for a sufficiently motivated instance admin to get your password in plain-text and undo any encryption that might be done on the private key stored on that instance.
To be actually secure you have to store the key separately, not use a webapp, etc. Solutions for that exists but aren’t really in the scope of a link aggregator which is why I think “send a message the recipient’s instance admin can see” is fine, ideally replaced by “send an actually secure message” if the recipient has gone through all the set-up hurdles, e.g. linked an address on an actually secure messaging service.
You are right. A solution that would keep messages secure and hidden from an instance admin will have to use a solution that’s not under the control of the said instance admin, and you might as well just use PGP for that manually. But now I’m wondering how does e2e encrypted services such as Protonmail do that, so you can be sure that they don’t have access to your data. I’m assuming there can’t be any guarantee, unless you have your keys separated from the app and do your encryption before you let the app touch it.