Are we trying to give everyone property so everyone can have a house, or are we trying to create more social player interactions?
Now, you can suggest that housing is a fail for social interaction. I can see the argument for that. Maybe it hasnt been that effective as it couldve been, and SE has been trying small fixes to to get people to be more interactive. But youd be hard pressed to say that housing doesnt have the intention of increasing social interaction. Since it is apparent that was part of the initial goal of housing, it doesnt make sense to create a housing system that does the opposite of that. So completely instanced housing that removes the neighborhood system, along with bells and whistles that would make visiting cities obsolete, is incredibly counter productive. All you would do is encourage player isolation.
Two ideas brought forth are already superior to this: Shouguns idea on pocket space so you can have your own property to design with works fine. The caveat is that you shouldnt be able to make it a replacement for major social hubs lest you want to promote player isolation. So design to your hearts content for funsies, but it wont be a city hub. The other one is turning the wards into a hub in of itself which I think was Barraind's point. Creating a centralized shopping district within a ward that would function like most city centers do while having some instanced housing.
I would think the solution is somewhere in the middle of all this. Im still of the mindset that providing and upgrading apartments would solve much of the issues (and as a side note: Make GCs have Airship/Subs something you can do there if you dont have FC/housing access, but thats a separate discussion), but also creating a central shopping district within wards would probably help create more player traffic and interaction as well as promote more property usage.
As for the game needing an overhaul, yeah some graphical issues need updating but were not running on new tech here. It's worth noting that FFXIV 1.0 was released in September of 2010, and that ARR was in 2013 and built using the same engine and set up as 1.0. BDO looks nice but that was released in December of 2014. Speaking broadly, BDO came out 4 years after FFXIV did, and was built differently. When they say there are limitations to updates, YoshiP and the devs are not BSing us. It is unfortunate, but to cut costs and relaunch the game, They relied on what already existed and modified it. For them to really overhaul graphics and looks of the game, that would more or less require rebuilding the base architecture of the game - something that is extremely time consuming and expensive. At that point, youd be literally remaking the game from scratch. You see this very same issue from all MMOs that have survived for more than a few years. Aspects get outdated, and they apply bandaids and clever techniques to get around it. But these are only small short term solutions. The game will not have as much graphical fidelity as newer games designed on better engines and techniques. Give BDO another 10 years, and that too will look outdated and poor in quality and there will be nothing they can do to fix it beyond small hotfixes.
FFXIV isnt the most stunning game Ive ever seen, but it holds up pretty well IMO. Theres a lot of small things they can do in the short term that would help quite a bit (update textures to be high res, as an example), but I think overall were gonna be stuck with what we got til this game goes the way of all MMOs.