Business Jargon 101:

Incapability: Adverb
Origin: Corporate Finance

Definition: Lacking Motivation to expend finances or resources to pursue a suggested course of action.

Basically, it's not that they CAN'T make instance housing but simply have no desire to completely scrap months of work and resources spent on the current system only to replace it with a fundamentally different system with it's own unique set of issues that will inevitably arise and put them back at dev step one.

As far as the devs have come, and as much time and effort as they put into developing and fixing things, from a Risk vs Reward perspective overhauling the system to make instanced housing is just logistically unadvisable. I don't blame them for staying their course and powering through the current issues. Success always makes more money than popularity. And as divided as the Final Fantasy fan base usually is, the Popular Decision still won't be "The Right One".