Think about things from the point of view of someone who has never used Reddit or the fediverse, but you've heard about them both from recent news articles and want to see what they are about.
Reddit:- You Google Reddit and your first result is Reddit.com. You click the link and are presented with the front page. You from scroll from a few hours and end up signing up and staying.
Lemmy:- You Google Lemmy and your first result is a wiki article for Lemmy Kilmister... Your second result might be join-lemmy.org, which you're smart enough to realise it's probably more likely what the news is about.
You click join-lemmy.org and are presented with a page of information about the fediverse, links to set up a server and pictures of code...
There is very little chance you're going to investigate further.
If we want the fediverse to replace Reddit then either
A) Lemmy needs to improve its initial impression and Search engine optimization
B) We should be promoting a different platform with a better initial first impression.
I'd recommend kbin personally as it gives the same sort of experience as Reddit from the initial interaction.
Lemmy and kbin are still very much in their infancy while Reddit has been around for nearly 20 years. There's definitely going to be growing pains since it's still so new and for right now at least most people that are going to join are people that are leaving Reddit so it's probably going to remain a fairly niche thing at least in the short term.
Secondly, I don't think they have to necessarily replace Reddit and they both could go on and do their own things. Honestly, even during my time on Reddit I found the smaller communities were better than large or default communities IMO. I just find that smaller communities have better engagement where ones that are too big your post or comment will end up getting buried.
Even if Lemmy or kbin don't overtake Reddit, I think there's still a place for them.