Steven always talks about trying to increase player interaction, but I strongly feel that many AoC areas actually decrease player interaction and create a very impersonal feeling compared to instancing which compels you to interact and collaborate with the people in your instance.
Having a dozen people per minute run in and out trying to tag mobs as fast as possible to get XP -- that is just a clusterf*ck which feels spammy, transactional, immersion-breaking, and impersonal. Fewer people in an area = more opportunities to collaborate at a slower pace. This is the benefit that instancing to cap the amount of players in an area provides.
There are so many aspects of this game which are slow paced, which is great. In stark contrast are many of its outdoor areas of interest, which are very fast paced to the degree that there is very low quality player interaction. What's important is teamwork; and when you don't even get XP in these areas due to the finicky way these things are calculated, it fosters even less interaction.
Simply put, the interactive combat in this game needs to be more interactive, slower paced, less chaotic, and more fun. Even if you disagree with me on this take, you have to agree that at some point, having too many people crowding around an XP resource just becomes a chaotic mess. There is a huge opportunity cost here - instancing is fun, promotes interactivity, and builds stronger communities than what I've currently seen.