I can understand defederating from Threads, but transitive defederation is bordering on insanity.
This will do nothing but exert peer pressure onto instances that wish to remain impartial. Transitive defederation will play right into Meta's hands by fragmenting the Fediverse further.
Everything up until your actual suggestion is not on-topic for this community, IMO. This feels like a post that was created mainly to vent about the run-in you mentioned.
Your suggestions will run into the same issues as democracy in the real world, and then some. For one, you'd need to ensure that each human person only gets to cast a vote once, and not multiple times through alt accounts.
Additionally, not everyone might be interested in the mod election campaigns that such a system will undoubtedly incur, but for the purpose of upholding democracy they'd have to be.
But I think in terms of federated content, you cannot be expected to do more than send information about the deletion out. If other instances don't respect it, it's not the originating instance's job to police it.
Your instance will still exist, and federation should continue as normal if you manage to reclaim the original domain.
If you have to switch to a new one, however, federation will be very awkward. Other instances will essentially treat you as a brand-new instance, and mirrors of old content will be "orphaned" and no longer sync.
For Matrix you could also say "better than Discord".