Only for bad players. This goes for PvP and PvE. Instancing is the easiest (and probably the best) way to allow actual coordinated teamplay, actual balance and to implement content that has a real skill requirement. In PvP, it allows to have teams of equal sizes (and balanced skill) play against each other. In PvE, it allows implementing enemies with specific attacks, balancing enemies (strength and number) and general tasks around a fixed max number of players. If a fight is not instanced, people can simply respawn and return to battle, as often as they like, or new players come and join in. It is almost impossible to fail killing any kind of enemy. People do not act as a coordinated group, where every single player matters, but as a mob, where nobody really matters. If you think that PvP and PvE content (with requirement for individual skill and coordinated teamplay) can be balanced just as well, without any kind of instancing, feel free to explain how that is supposed to work.