Why does the design of any application for Lemmy look many times better than the design of web instances?

I suspect to keep with the decentralized theme, they provide the back end and publish a standards spec, which then allows front end designers to set things up how they like.

Remember that just because you are a programer doesn't mean you do everything with that program. This is one of those front end back end things where specialised people in back end can do what the like and leave the front end to people who like front end stuff.

Eli5 answer:

Typically, when devs build a product, a common method is to gather backend devs, frontend devs, ux designers, devops, project managers, etc. Everyone meets periodically and explains status and bottlenecks.

In open-source, you don't have that. It's whoever is willing. Extremely rare are meetings. Often discussion happen in issues, PR, or somewhere else.

In typical development, backend devs work on something and get feedback from frontend devs, who get feedback from ux designers, all up the chain.

In open-source, backend devs try to create interfaces that anybody can tap into. They think about all the use cases, and create ways for someone else (ux and frontend) to tap into. Thats also separation of concerns, as backend handles business logic and frontend handles user interaction.

If a backend dev does a good job, then the flexibility allows the User interface to shine. That's what we're seeing here.

Their view is probably that they have enough on their plates at the moment with the backend.

Alternative frontends can be managed by independent projects, such as this one

They don't need to. The frontend they have is perfectly functional, just not particularly pretty.