Having lower quality items then what is in instances, negates the content. I do not know of anyone who does work with no reward. Example how many people run darkhold dungeons anymore? There is just no reason to.

Needs to have equal rewards, I see no reason not to. Open World = heavy competition if lotto spawns, instances = all depends on your groups skill if you win or lose, but you have no competition.

Solution to botting/hacking.... do not make lotto spawns. Make force spawns (pop nms) and World event type deals. Look at the GW2 large open world dragon fights and XI ZNMS if you want to see some good open world stuff that bots cannot give an advantage. Doing this there is nothing to bot and you have open world.