Why the heavy focus on instance only?

[Zoltan]

Do you mean sustainability, or perhaps, longevity?

Did you miss the part about ALL dungeons being instanced? Yes, Yoshi said that he would leave strongholds in their current form and does not consider those to be dungeons.
Did you miss the part about restricting the number of players required to enter these instances?
Do you really wnat to form parties with the Dungeon Finder, or do you want to have the flexibility to pick and chose who you group with (even if its from a list of party seekers)?

There are many MMOs that have limited dungeons to instances (like Vindictus).

I , for one, do not see why Final Fantasy should be made into another MMO or WoW clone.