Because you can move between different domains without losing your subscriptions and subscribers, there is no real need to use your custom domain. But because it's not possible to move your old content (I assume because moving files is difficult), I still am self-hosting so I can own my own content.

Another way of doing it is if you're already posting your notes, pictures, etc. on your own website, you can make it ActivityPub aware and use your website instead of Mastodon.