Are we playing the same game? Everything in FFXIV is Instances. Quest Battles, Dungeons and this will not change unless they remake the game again. . . .
Why is that? its not like you need a new engine for an open world content. Just need a different brain making contents.

While everyone is hoping for Open World content, its a pipe dream.
Same thing can be said about FFXIV in 1 year, when people leave of boredom and repetitiveness.

Dynamis, from XI, was an instanced world. If you remember, for the longest time, only 1 Group per Server was allowed to enter at a time. Thinking back on it now, that was completely ridiculous.
That is all the 15 yr old engine could do, but that was 15 yrs ago, we can have multiple parties enter, but of course the difference between FFXI "instance" and FFXIV instance is huge.

FFXIV dungeon is compared to a BCNM area, not Dynamis.