Pros:
1. full control over moderation
2. the federated timeline is pretty much your home timeline, resulting in better signal:noise
3. As a result of 1. and 2. you get far less undesirable instances unexpectedly federating with yours, and much less need to maintain domain blocks. User-level silence and blocking is manageable
Cons:
1. Discoverability is more limited. You start off shouting into a void. Relays help but can negate the pros.
2. More time and expense to maintain