again, your “lot of small instances” scenario is more expensive than few big ones, because there is a lot of unneccesary overhead.
that is not to say that there should be only big instances, but you really seem to think you have invented some perpetuum mobile, and let me assure you - you did not.
if you have enough admins willing to run small instances and finance them out of their own pockets, these same people can just contribute money to some bigger instance instead.
and vice versa - if you’d end up in scenario where you don’t have enough people to finance the big instance, why do you think these same people would be suddenly willing to finance the small ones AND add some admin work on top of the money? (which they may be lacking both time and skill to do)
also this is totally academic discussion, you are just drafting catastrophic scenario for which you have no basis in reality. just look at the wiki and you will see that people will pay for thing they consider useful.