It does though. Someone has to pay for the hosting costs. And the domain (yearly) cost.
As an instance runner, it isn’t a LOT of money, but still, it is money. It DOES cost to run an instance, and donations/sponsorships are nice to help defer the costs.
I think a “selling” point, or rather, sponsorship point, is identity. You get a good social handle, and you are insuring that they will have a place to post their stuff. Like things like linktr.ee for example. People use that for their digital “identity”. Mastodon is like that.
Now it would be great to see tools to allow people to customize their own profile page more. I’d be in support of that.