Reason SE gives us: Servers too expensive

Real reason:

SE wants to maintain an "optimal" level of housing supply vs demand so that there is always a rather "high" price for housing. That "high price" translates to players' willingness to get housing via methods like spam clicking a placard for 24 hours (now defunct) or buying it third party for hundreds of millions of gil.

It is exactly because housing is scarce that auto-demolition means anything. If, say, half of the medium plot are empty on your server and you can save your housing layout and items easily, would you care about demolition? Most people would say no.

If housing was actually very easy to get, people would just use a third party plugin to save their housing layout and unsub for five months care-free because they can just buy another house easily when they play again.

Housing is scarce because they make money by keeping it scarce. Keeping it scarce means demolition actually is a huge cost to the players since it's no longer guaranteed they'll get to play with houses again, so they're now incentivized to pay $13 to keep it.

SE plays a carefully tight balance here. Too scarce, and only the very few houseowners will continue subbing to prevent demolition. Too abundant, and people don't care about keeping their houses.