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I think a lot of people start up a server because at the time it fits with what they want to do. Once you realize this is not a job (correct description) you wanted to take on it becomes much harder to motivate it.
As soon as you run a server for others outside of the immediate friends/family circle it can be really difficult to deal with the expectations of uptime and service. Also, some don’t want to ask for help but also take on all the moderation themselves too.
how much can someone limit the instance? Like can they not allow magazine creation? It would be good for the good folks who run instances to think about scope and set limits. That does mean some large instances will be the backbone but that does not change that small instances will lighten the load and increase robustness.
It’s possible to turn off local community creation, image uploads, etc.
Lemmy.myserv.one doesn’t host any local content but you can easily browse the rest of the fediverse. Having a diversity of server sizes and formats is definitely a benefit of Lemmy that we should be trying to take advantage of.