I used to think that housing demolition was how they kept a certain number of people chained to the subscription even during downtimes of no content, but they've had a moratorium on demolition for so long at this point that it's hard for me to still believe that a sub-anchor is Square's primary goal. Also in regards to island sanctuary, Yoshi gave an interview with Famitsu recently where he apparently came right out and said that furniture wouldn't work on the island and it wasn't intended to replace housing at all. Here's a link to a page with links to the article and translations.
At this point, I'm just chalking the housing situation up to sheer incompetence. Even if a lot of it boils down to hardware shortages, they've had years to deal with this and XIV is hugely profitable for Square so Square would have to be stupid not to invest back into it to keep their money printer happy.