Instanced housing would do more harm in my opinion than it would fix stuff. Sure the instanced housing would give everyone their plot but i learned in wildstar that this isn't really the greatest way. Ofc it's nice to build as you wish but at the end the housing system we have here in XIV is based on a specific feature, it's limitied and to show off what you have. And for that reason it needs to be "open" or as we have it now "semi-open" so others players are forced to see other players houses, somehow.
And i think the housing system is just fine as it is, it is exactly what it wants to be and the devs go even further and for all that don't want to hunt (as far as i heard a great deal in the asian community) for plots literally everyone can get a apartment and they already talked about us being able to upgrade (?) the apartments someday.
For the asian market this system is just right, it's hard and grindy and it's a achievement to get a house and you can show off at the end of the day. Maybe our western mentality isn't made for that and we want it all for free but tbh it is not the main feature of the game and it is exactly what it wants to be, exclusive and grindy.
So i don't know why people always cry so much about the housing system. If you don't like cucumbers then don't buy them. Play something else that suits your wishes more and don't try to force the cucumber seller to change cuz you like eggplants more.