What is stopping an instance run by a for profit entity
Nothing. In fact I fully expect this in the future.
I think it would be great for google or Microsoft to provide lemmy identities for their e-mail clients. There is also a space for paid providers who could provide secure & reliable hosting of lemmy accounts and communities.
I think it would be a good thing for businesses to spin up a lemmy instance instead of a forum, or for media outlets to serve their own mastodon content from their own domain so they don't have to rely on a third party to verify their staff.
ending up in the same situation as we were with Reddit in X years?
The same reason that it doesn't happen with e-mail. Or cell phones. Or web hosting. Because you can pick up a move if you don't like your provider. Or you can host your own.