I don't speak for everyone who likes instanced housing but I see instanced housing as being fold more powerful, at least in possibility, than non-instanced housing. (A lot assumed when people say instanced housing, since technically apartments are that but I never meant FFXIV's apartments when I've said it).
WS housing miles > than FFXIV's (except visuals, lol. imo). And you can have neighborhoods now (WS). Can give players permissions so the 5 plots is worked on by much more than 5 players, each of those plots and housing being bigger than FFXIV's largest size. They (WS) could improve/make "guild" plot easier since in the current set up each plot is owned by a specific person and not an entity - not impossible to have guild set up housing though.
You simply can be far more generous to the players in terms of tools, speed of release ("Ishgard"), and visual creativity with an instanced housing system where each player get's their own area (or even for example FC housing if it was like that, with weird things you might do in GW2 and it's housing that each Guild gets is the size of a full zone - although there isn't as strong of a personal housing element).
So imo, its nothing to do with spite and everything to do with "I don't think the neighborhoods are that great*, and I'd rather have the power and utility of a personalized system". Also don't believe they have to scrap the front area (could leave it), although I wouldn't care if it was (for my own sake, I understand others may).
*(interaction in my area across my total experience of the game with strangers, on Balmung - the fullest server, aggressively approaches nil. The amount of "ghost town" greatly outshines "bustling neighborhood"). If there were specific people you loved (or FC) sharing your moments with I strongly believe you'd be better taken care of in a WS like neighborhood anyways where you could work with them on a far more intimate level while still each having a house of your own.
Then again I like to remind of LotR since their system is incredibly similar to FFXIV's (and older) but also doesn't have a limited problem since the wards auto-generate when full.
More powerful personal system > current system - strictly imo. I don't have a urge to utterly remove the current one, but I don't care to see it exist as much as I care to see a new "better" (imo) system in it's place.