I too self host my instance. I opted to use Pleroma (https://pleroma.social/) for a backend to interact with the fediverse because of the easier setup and lower hosting requirements.

It’s been working for a few years now and (luckily) I never had major incidents.

It’s very refreshing to be in full control of one’s data (compared to the centralised experience with other socials like Twitter and Facebook).

I considered Pleroma, but opted to use Mastodon because DO had a ready-made droplet.

I will likely switch to Takahe (https://news.ycombinator.com/item?id=33731739) as soon as it's a little more ready, for the reasons you describe.

"Notice: due to the recent influx of traffic, new subscriptions are closed." https://masto.host/

"hi! there's been a huge wave of new members and new instances recently, and that's a Lot of work. i am tired and especially won't be very available in the next months for health reasons, so i won't be accepting new instances for a while." https://fedi.monster/

"Due to overwhelming demand, registrations are currently closed." https://cloudplane.org/

A lot of users on these are opening up public instances, rather than their own. I don't see a huge amount of "host mastodon for yourself on your own domain" people.

I went this route (via https://marketplace.digitalocean.com/apps/mastodon - I would have used masto.host otherwise). Im keeping an eye on Takahe (https://news.ycombinator.com/item?id=33731739) as hosting mastodon is kind of expensive, for the type of use I make of it.

Speaking from three years’ experience, Mastodon just isn’t designed with this use in mind. Having the custom domain is neat but for now comes at the cost of an awkward and isolated experience.

For ownership of identity keep an eye on this issue:

https://github.com/mastodon/mastodon/issues/2668

One's own or a small instance with a few friends is suitable for people who are high profile who post challenging content. People will follow them from anywhere and visibility will be gained that way. Some high profile people do not want to be subject to the whims of moderators. Examples include every politician and many journalists. If you are not a high profile publisher, you will likely experience a bit of isolation with your own instance.