The instance/dungeon servers are servers just like the login servers are servers. I still have to sit in a (very small) queue to get into the game on an average evening, because that makes sure the servers don't crash due to more people than it can handle.

You're in a queue to stop the server from crashing due to too many people at once. Whether that's login or dungeon servers, doesn't really matter. The population limit was reached and now you are waiting for a free spot.

Do I wonder why it's this bad when other games have no issues with instanced dungeons? Yeah, I do.. but I also know the development team is doing the best with whatever they have available, so clearly what they have available isn't quite enough for whatever reason.