I agree. Just adding more wards (automatically or not) doesn’t take into account the server space that it would take to keep those wards permanently loaded and accessible!
It would’ve been nice if they had ever made a housing ward with all the plots the same size, so they would be upgradable as people earned the gil and/or decided they wanted a larger space. But they didn’t. And the fact that they’re working on a housing mirage is evidence that they did not intend for the larger sizes to be some sort of status symbol for only a lucky few.
For my part, I want to see all the features that could be added to an instanced system that we’ll probably never see in the wards because of their limitations. Look at what they did on the island for starters. I want 90 outdoor item slots for my small yard! I want the possibility of open air housing skins, accessible and useable balconies, the ability to change the ground texture of the yard, etc. So many more features we could have if we actually had an instanced option!