I'm not a server engineer, nor do I work on server budgeting. The issue likely runs more in the amount of separate connections/instances being currently maintained. When our server has around 14k people at a high-point, that could be 14,000/24 players per instance = 584 Battles. However, players sink and choose new ships and start new battles, so it could be more like 1,000+ Battles at a single time. However, some folks are in Co-Op with 9 or less players so it could be more like 1,500+ Battles at a single time. However, we occasionally run Brawl events with small teams so it could be 2,000+ Battles at a single time.
It was explained to me that each Battle Instance uses resources. The smaller the Battles/Brawls the more plates are being juggled in the air at the same time. So, it's not a resource issue in the sense of having to "juggle more plates" costs us more in like... electricity? It's more that if Battle Instances go up, we may need to purchase more hardware to accommodate them which would be a direct cost expectation change.
I was asking about how possible a single-player on-server instance would be. Currently we have Training Rooms which do provide that option, so it seemed feasible. The response was the resource expectation should single-player instances be treated as a queue type. Again, I'm not a technician so I don't know the depth of the issue, but my takeaway was the "plate juggling" analogy I gave above as a way to conceive of it.