FFXIV is overloaded with player housing and the main hubs are still overflowing even though there's no real benefit to being there. In fact housing districts are often quite empty except for guild housing where members sometimes hang out at for fun.
This whole overexaggeration of "omg people are going to sit in their houses" is ridiculous. People go to major cities because they are more convenient and they like seeing other players. Then again, I forget how antisocial WoW can be by nature. In that case, maybe we should have housing just so that players can finally complete the cycle instead of pursuing this ongoing fiction of 'community' where non truly exists.
Don't even bother bringing up garrisons. Players were forced to sit around doing boring-ass garrison chores that took all damn day. Naturally they are going to be sitting there doing them, because they don't have a choice. And GARRISONS ARE NOT PLAYER HOUSING. They have literally nothing in common. Garrisons are not designed to be customized aesthetically and enjoyed, they are 100% mechanical, arbitrarily designed to perform chores and little else.
Houses would not be that way, which is probably why they were never added--you can't just paste in housing effortlessly. It would require implementation and customization, a lot of diverse game design that Blizzard isn't going to bother with for something that doesn't involve PvP combat, raiding, or endless world quest grinding.
- - - Updated - - -
Sure, plenty of people enjoy it for that. And let them. Most players just like customizing their houses, though. Having a place to hang out with guildies is nice. Any RP server would love having them for hosting events as well.
But nah, every house is really just Goldshire Inn.
Hate to break it to you, but if players just want privacy, instances have existed since vanilla, and garrisons have easily provided it for years. And yet oddly enough you don't hear about hardcore ERP going on in people's forts.