The optimal way to use such feature would be for small-and-specific areas such as dungeons and quests. Anihilator and Pits of Inferno are good examples, they can only work in an open world map because people won't do them 24/7 and it's once per character with high level requirement. If you're creating a custom server, it might come in handy if you intend to increase PVE difficulty with dungeons. You can take Svarground's arenas for example: when there is someone running it, nobody else will be able to, if the game design for your server has something similar as one of the main features it would create a huge queue of players trying to get into the arena.
Also, being able to instance maps can improve housing system so it won't be limited to the houses available in the open world. Housing features and customization could become more complex and more personal.