I like the use of both depending on its fit for the given activity.

Strongholds and the like are perfect open world content. Slightly more complex activity's like cutters cry and the up coming crystal tower are best suited for instancing.

In my opinion the reason saposhe fell on its ass was two fold.
1) At the time of its inclusion most people were far past its level range.
2) They didn't exactly get you excited or give you a reason to go in and explore.

There was exactly one side quest that had you go out to the entrance and talk to a npc. That npc spouted off some hogwash about Mistbeard's lost treasure. Now had they added in a whole bunch of quests to go in and explore the area Perhaps it would have had a bit of longevity. Perhaps it could for new players if they were prodded into plumbing the depths a bit more. Either way it just never clicked with the current players. It is a shame as it's a pretty cool place.