When you step back and look at the big picture it makes sense. What many people a problem understanding that instances would take a lot more space. A type of valid solutions would have been to make it a form exclusive or additional content. While it may seem unfair to most SE does have a form of instances in inns, apartments, and FC rooms. Now most people really just want to be creative and have access to some of the perks, such as gardening and over all decorations. The only reason I even got an FC house was really for the benefits of FC options vs personal housing. IF people really want to decorate would it not make more sense to just go play the sims ? -.- Now I would say that long term legacy players should maybe get a free pass that have shown constant loyalty by playing since day one if it ever came to that or at the very least a discounted price.
Therefore pros and cons;
Instance housing; Pro: people would stop complaining Con: Server stability, possible DC loops specially while crafting or NPC interactions.
FC exclusive; Pro: Stability, stops market inflation. Con; Seems unfair, player base would drop. More bitching.
FEE based Optional content; Pro: gives an option and sense of urgency for more revenue. Con; people will see it as a company that all it cares about is money, not everyone can afford it, most likely will have maintenance fee.
Current options; Well balance in terms server stability, depending on servers value varies, people complain and lack the understanding to the concept of optional content. Based on thread numbers the housing is close to 25% ( though I'm pretty sure it's a wild estimate and the housing is a lot higher.) When you think about it even players with homes fail to log in daily so why spend resources on content that the company knows it may not be constant? From a business perspective what SE is doing makes sense. Now the option for housing is there, and experience can vary based on servers. You CAN purchase a home if you have enough funds, is available, or people are willing to sell. Hence as per even game stop / SE the keyword "Purchase" in terms of in game.