Discord actively encourages this by making it so easy to form group DMs and splinter servers (a good thing from a user's perspective, but a community-killer from the server's perspective). And financially, it's probably more profitable for Discord to do it that way too.
In terms of dilution, that's something you can generally fight. There's a lot more tools in today's Discord to mitigate "too many channels". Threads and Forum Channels can help. There are moderation actions that you can take like "we're going to move this channel read-only because it hasn't been active since X, consider new conversations in #more-general-channel or threads of it".
In my experience one of the biggest causes of dilution that's less obvious is your server's notification strategy. If a server @everyone or @here or @channel enough, I have a tendency to mute that server and read it less often, and I'm not alone on that. Good use of easy opt-in/opt-out roles for notifications is key moderation tool. In my opinion, a lot of the best servers entirely disable @everyone/@here/@channel, have dedicated notifications for alerts, and have a dedicated Announcements channel for any "everyone notification" (but without @everyone mentions) that can be followed or muted separately from the rest of @-mentions (more personal replies, for instance).
Anyway, if you seem to be facing too much dilution, the other key is to ask people what they need, if they are happy with the current channel layout, and if they have suggestions on channels to merge/reduce/move to Threads or Forum Channels.