To an extent, sure. But overcrowding can be a thing, too. When no one can do anything and they leave because of it, server owners tend to use bigger maps.
It's basically a choice between losing the challenge of pollution, or losing your entire population. And as you've already noticed, most people would rather give up the pollution challenge.
I never mentioned a specific server, this is something I see on a lot of servers. There are some that get like 10 players and then die, but there are several that get a huge crowd, then it dies down, then if you're lucky a few people will join in the late game. You don't see the same issues on official servers because you're always right there on the front page of the worlds page, so you tend to get more late game joiners. For most server owners, retention is a lot more important than it is on the official servers.
Overcrowding is one of the challenges to solve with the governance systems. If players do not want to deal with a specific challenge, then of course admins can make changes as they deem fit for their audience. And it is pretty easy to solve as the problem isn't that big, especially since the spawning UI distributes players around.
But I personally find it a bit weird to remove multiple challenges purposefully for the audience and then complain the challenge isn't there.
Ecologic challenge comes from density, so does overcrowding. Both in the end are ecologic problems.
//EDIT: The assumption that official servers would get more late joiners unfortunately is wrong. In the opposite they suffer a typical "switch to the next official server on next friday" syndrome, so are even more affected by the hard drop after the starting week than most community servers. This results precisely in a big amount starting out and then the dropoff hits heavy, as your example was...
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