Peer-to-peer sharing in the 90s was the best example of decentralization that really worked, grew really quickly and had a massive user base.
Napster was probably the most successful consumer decentralization software ever with something like 25M users in 2001.
Sci-Hub, Torrent video sites etc... are very popular and those are all decentralized with torrents.
So it's not that decentralization can't work, it's that legal structures won't allow it to work, because decentralization doesn't play nice with locking down IP.
The difference in outcome may be due to less economic incentive. It's easy to share photos on instagram and it's much more difficult to, say, download 20 academic papers without emptying one's bank account. There is a cost to the user to sharing photos with instagram. The cost hasn't been realized by the average user.