(1) Some of the collaboration features (e.g. work on Gitlab itself) depend on having everyone on the same instance.
(2) Gitlab.com gives them a nice dogfood-esque environment for what it's like to actually operate Gitlab at scale. If they are having problems scaling it, then potentially so are their customers. Fixing the root cause is usually a good thing and is often an imperative to avoid being drowned in technical debt.
(3) It moves the problem in some respects. Modern devops techniques mostly allow the number of like servers to be largely irrelevant, but still.. the more unique instances of Gitlab, the more overhead there will be managing those instances (and figuring out which projects/people go on which instances).
It's a simple approach which I'm sure would work, but it also means a bunch of new problems are introduced which don't currently exist.
I think it's totally fine admitting when you've stopped being able to scale up, and need to start scaling out.