It stems from the fact that there are wards where you can have next door neighbors and visit their houses. If it were instanced like other MMORPGs, you wouldn't be able to see someone next door.

These wards are actually separate area server programs. So if they add new wards, they have to manually set this up and set aside the appropriate resources for them to run constantly.

Now, there is actually instanced housing. You can buy a room in a private or FC residence. Or you can buy an apartment. There are caps on this, but they are very high and it's instanced.

The drawback of rooms and apartments is that the rooms are small. I think they are considering about possibly making these bigger, but I don't know if it'll end up happening or not.

I think that bigger room options for residence and apartments, more wards and trying to share wards across worlds would be things I would think of. Or move them over to a cloud server which are better designed for scaling resources (they use physical machine racks btw not cloud services).